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Slashing all the gains acquired yesterday, the dollar depreciates further
Written by article default Friday, 15 October 2010 05:35
The single currency retreated on the daily scale driving the dollar index to a 10-month low. Where the index opened today’s trading at 76.68 while currently hovering near 76.47 levels, it managed to touch a high of 76.70 and a low of 76.38.Further depreciation is projected for the dollar as the Fed intend to intervene in financial markets by purchasing debt in hopes of boosting the economic recovery.
Accordingly, investors are seeking safe haven investments including gold as a hedge against inflationary threats that might be triggered in the upcoming period due to market’s liquidity saturation.
Analysts see further appreciation for the European shared currency, thus affecting growth in the continent by reducing the appeal of European goods among their rivals due to higher cost.
The Euro is projected to advance targeting 1.45 levels by year end, after slumping to four-year low earlier this year against the dollar.
Further quantitative easing by the Fed will devalue the dollar further. ECB’s chairman, Juan Claude Trichet, expressed the governing council’s approval for the current economic conditions and interest rates, while the rescue package that was extended in September to Greece, Spain, Portugal and other countries is far likely to be withdrawn from markets at the time being.
The euro-dollar pair was little changed at 1.4086 where it reached the highest at 1.4113 and the lowest at 1.4006.
As for the royal pound, expectations signal that the cable will ascend to trade at eight-month high against the dollar as the pair targets 1.6340 following the breach of the pivot resistance at 1.5970.
The pair is currently trading at 1.6050 where it managed to reach the highest at 1.6065 and the lowest at 1.5969.
The yen rose against the dollar, where the pair sank to breach the pivot support level at 81.60 where it’s currently trading at 81.18. The pair managed to reach the highest at 81.61 and the lowest at 81.11.
With regards to technical analysis, the pair’s trend is still bearish, targeting 81.00 then 80.15, but requires stability in trading below 81.30.