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UFXBank Forex News: Dollar Drops as Interest Rate Remains Unchanged

Written by article default Thursday, 27 January 2011 08:03

USD Dollar (USD) – The Dollar dropped versus the other major currencies after the Federal Reserve maintained its plan to purchase $600 billion in addition to keeping the interest rate unchanged at 0.25%, both of which, caused investors to prefer risky assets during the session. The NASDAQ and Dow Jones strengthened by 0.74% and 0.07% respectively. Crude oil rose by 1.3% and closed at $87.33 a barrel. Gold (XAU) strengthened by 0.1% and closed at $1333 an ounce. Today, Unemployment Claims are expected to rise from 404K to 408k, Core Durable Goods Orders are expected at 0.60% vs. 3.60%, and Pending Home Sales are expected to decrease from the previous month (0.8% vs. 3.5% prior).

Euro (EUR) – The Euro rose to a two month high against the Dollar on a positive showing from stock markets and commodities being more attractive due to the interest rate in US. In addition, the European relief fund’s bond rose in its first day of trading. The resistance of the EUR/USD on the daily chart is 1.3780, and as long as the rate is above the 10 moving average on the daily chart and the RSI is positive, the euro is still strong and the momentum is bullish. Overall, EUR/USD traded with a low of 1.3640 and with a high of 1.3722. Today, German Prelim CPI is expected to weaken from 1.00% to -0.3%.

EUR/USD – Last: 1.3702

British Pound (GBP) – The Pound strengthened in Forex trading against the Dollar after minutes from the Bank of England’s last meeting showed that a second policy maker favored higher interest rates as inflation remains above target. The GBP/USD has been trading on the 10 moving average line on the daily chart and therefore the momentum is not clear. As long as the rate is above 1.5800, the pound is more attractive. Overall, GBP/USD traded with a low of 1.5769 and with a high of 1.5937. Today, CBI Realized Sales are expected at 39.00 vs. 56.00 prior.

GBP/USD - Last: 1.5915

Japanese Yen (JPY) –The Yen fluctuated versus the Dollar during the European session, and in the end, succeeded to increase after the announcement from the fed. The momentum of the USD/JPY has been bearish over the last few days. If the pair breaks below the 81.80 level, the pair could decline to 81.00 or even less. Overall, USD/JPY traded with a low of 81.98 and with a high of 82.60. No economic data is expected today.

USD/JPY-Last: 82.13

Canadian dollar (CAD) – The Canadian Dollar strengthened against the US Dollar for the first time in three days as the Federal Reserve keeps stimulus measures in place, bolstering demand for higher yielding assets. As long as USD/CAD is trading below 1.0000 the Canadian Dollar is more attractive and the next support level on the daily chart is located at 0.9900. Overall, USD/CAD traded with a low of 0.9937 and with a high of 0.9981. No economic data is expected today.

USD/CAD - Last: 0.9945