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Currencies Update: Low yielding assets sought as safe investment
Written by article default Wednesday, 24 November 2010 11:10
Low yielding assets strengthened against higher as North Korea and South Korea exchanged artillery shells, which boosted demand for low yielding assets as a safe investment.Angela Merkel, the German Chancellor expressed her concern that the Euro faces “Exceptionally Serious” situation due to the introduction of a bailout for Ireland. The euro fell to three-month low against majors as estimates forecast a total of €95.0 billion would be needed to aid the deficit burdened country.
The US dollar index opened at 79.51, while setting a high of 79.95 and a low of 79.44, while currently trading at 79.91.
The euro weakened against the dollar as well, on speculations that Ireland elections would hinder aid talks with EU and the IMF.
The dollar appreciated against the euro to trade at 1.3344, compared with the opening levels of 1.3365, while setting a high of 1.3418 and a low of 1.3282.
The pair is forecasted to drop further and target the support at 1.3299, where stability below 1.3400 keeps the chances of achieving those targets high.
The euro rose by 17.0 percent since the Fed hinted for the first time in August of a possible injection of money, which led the dollar to depreciate to historic lows against the euro and the yen.
The Fed will release its Minutes for November 2 – 3 meeting today, showing member’s argument about the size of the package provided to markets totaling $600.0 billion.
The pound rose fell the dollar to trade at 1.5791, compared with the opening levels of 1.5773 where it managed to reach the highest at 1.5836 and the lowest at 1.5739.
The dollar rose against the yen to trade at 83.22 on the daily scale, where it managed to touch a high of 83.35 and a low of 82.92.
A bullish intraday direction remains intact, targeting 84.00 and 85.00 but requires stability above 82.65.