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Currencies Update: Pound and Euro surge following ECB and BOE rate decision
Written by article default Thursday, 07 October 2010 10:16
Speculations that the Federal Reserve will inject more stimulus money into markets placed downside pressures on the single currency and forced it to depreciate to record 15-year low against the yen.The US dollar index that tracks the performance of the dollar against a basket of currency fell on the daily scale to trade at 77.02, compared with the opening levels of 77.47.
ECB preserved its rates at record low of 1.0 percent, while the press conference held by Trichet, the ECB president, caused upside pressures on the shared European currency following the remarks Trichet released on the condition of the economy where the ECB sees economic outlook tilted slightly to downside, while assuring that the current key rate is “Appropriate”.
Euro-USD pair ascended to trade little changed at 1.3937 while setting a high of 1.4025 and a low of 1.3896.
If the pair managed to stabilize above 1.3980, it would cause an extended bullish direction targeting 1.4035 and 1.4100.
The drop in the dollar helped commodities surge and extend its rise where Gold is currently trading at 1,347.96, while setting historic new highs at 1,364.75 an ounce.
As for the pound performance against the dollar, the royal currency rose following the rate decision of BOE, which witnessed no change to the bank’s monetary stance as interest rates were preserved at 0.50 percent along with the APF program at £200.0 billion.
The pair is trading at 1.5938, compared with the opening levels of 1.5888, where it managed to reach the highest at 1.6016 and the lowest at 1.5844.
Expectations for more bullish movement today initially targeting 1.6000 and stabilizing above it, noting that breaching 1.5870 will postpone expectations of bullish targets prevailing.
As for the yen, the pair is trading to the downside since this morning ignoring the bullish momentum over four-hour basis, while the bearish channel’s resistance is at 83.30 and is still the ceiling for current trading. This, alongside the negative pressure coming from the 50 MA, maintains expectations of a bearish trend, as long as the daily closing is below 83.30.
The pair is trading at 82.27, compared with the opening levels of 82.91 where it managed to reach the highest at 83.03 and the lowest at 82.09.