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Currencies Update: Dollar drops after US growth data
Written by article default Friday, 29 October 2010 06:33
The green currency slipped against majors after annualized GDP figures which did not come up with any clue the Fed would not embark on a second round of stimulus next week.Annualized GDP for the third quarter matched forecasts at 2.0% compared with 1.7% in the second quarter.
Other US data showed that Michigan confidence fell to 67.7 on October from 67.9.
Speculations are rising the Fed would introduce $500 billion for the coming six months while the whole package may range between $1 trillion and $2 trillion.
Actually, the size of the QE will decide the dollar's next direction as few or a lot spending would reflect the severity of the economic situation the world's largest economy is passing through.
The dollar index, which tracks the dollar movements versus a basket of major currencies, fell to a low of 77.16 from the day's high of 77.75.
Also, Canada released its monthly GDP figures for the month of August coming in line with median estimates at 0.3% from -0.1%.
In the euro zone, the high unemployment which remained at 10.1%, the highest level in more than 12 years, as well as the drop in German retail sales pushed the European Common currency lower against yen and other majors except the dollar.
Beside economic data, the European Union discussion to find a suitable mechanism for countries facing the threat of default renewed debt woes in the region.
Concerning the euro-dollar pair, it rebounded to a high of 1.3951 after falling to a low of 1.3805, following the breach of strong resistance at 1.3890.
Meanwhile, the pair is trading at 1.3917, whereas the trading range for today is among the key support at 1.3775 and the key resistance at 1.4160.
Moving to the royal pair, it continued its rise for the second day but it fell as it approached physiological level at 1.60 in a second attempt to breach that level after it failed remain above earlier this month.
The pair is currently trading at 1.5970 while it has recorded a high of 1.5591 and a high of 1.5875, while the trading range for today is among the key support at 1.5800 and the key resistance at 1.6150.
With regard to the dollar-yen pair, it resumed its downside trend again after having a break on Tuesday and Wednesday's sessions; however, momentum indicators are giving bullish sign on the weekly charts.
Currently, the pair is trading at 80.70 after touching a high of 81.06 and a low of 80.52, while the trading range for today is among the key support at 79.00 and the key resistance at 81.35.