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UFXBank Forex News: Dollar Drops as Euro, GBP Strengthen

Written by article default Tuesday, 01 March 2011 07:46

USD Dollar (USD) – The Dollar weakened in Forex trading against most of the other major currencies on speculation that the FED might signal a continuation of economic stimulus. The Chicago PMI came out at 71.2, better than the expected 67.5 and Pending Home Sales, came out at -2.8%, worse than the expected -2.5%. The Stock Markets in the U.S closed positive as the Dow Jones jumped by 0.79% and the NASDAQ gained 0.04%. Crude Oil touched the $100 level once again, but retraced and closed at nearly $97 a barrel. Gold (XAU) traded almost unchanged from yesterday, closing at $1410.60 an ounce. Today, the ISM Manufacturing Index is expected at 60.9 vs. 60.8 previously and the Fed Chairman is expected to testify as well.

Euro (EUR) – The Euro strengthened against the Greenback on speculation that the ECB might consider increasing the interest rate in order to control inflation. The CPI came out at 2.3%, worse than the expected 2.4%. Only breaching the resistance level of 1.3850 will push the pair higher, otherwise a rebound back to 1.37 zones is possible. Overall, EUR/USD traded with a low of 1.3710 and with a high of 1.3854. Today, the German Unemployment Change is expected unchanged at -13k. Also, the Unemployment rate is expected to remain unchanged at 10%.

EUR/USD – Last:  1.3808

British Pound (GBP) – The Pound gained against the Dollar on speculation that the BOE will raise interest rates in order to restrain inflation. Only breaching the resistance level of 1.6280 will push the pair higher, otherwise a rebound back to 1.62 zones is possible. Overall, GBP/USD traded with a low of 1.6070 and with a high of 1.6275. Today, the Nationwide HPI is expected at -0.2% vs. -0.1% previously and the Manufacturing PMI is expected at 61.5 vs. 62 previously.

GBP/USD - Last: 1.6269

Japanese Yen (JPY) – The dollar rose against the yen as oversold conditions were seen and the lowest support level had not been broken. Household Spending came out at -1%, better than the expected -1.3%. Breaking the support level of 81.60 might extend the decline in the pair. Overall, USD/JPY traded with a low of 81.61 and with a high of 81.97. No major economic data is expected today.

USD/JPY-Last: 82.14

Canadian dollar (CAD) – The Canadian Dollar rose against the US Dollar, posting its highest level since Nov 2007, as it declined for a fourth day in a row after the GDP came out at 0.5%, which is better than the expected 0.3%.  Holding below the support level of 0.9770 might extend the decline in this pair. Overall, USD/CAD traded with a low of 0.9705 and with a high of 0.9800. Today, the Interest Rate Decision is expected unchanged at 1%.

USD/CAD - Last: 0.9708