UFXBank Forex News: Euro Drops After Reaching 4-Month High | Learn Forex | GoLearnForex.com

UFXBank Forex News: Euro Drops After Reaching 4-Month High

Written by article default Tuesday, 08 March 2011 07:57

USD Dollar (USD) – The Dollar rose versus most of the other major currencies in forex trading on expectations that the high oil prices might derail the fragile US economic recovery. In addition, the greenback gained ground against the EUR after Moody's ratings agency cut Greece's credit rating by three notches to B1 from Ba1. But, the Stock Markets in the U.S. closed negative as the Dow Jones fell by -0.66% and the NASDAQ lost -1.40%. This erased last week’s moderate gains, as chipmakers slid after a ratings downgrade and oil advanced to 29-month high. Crude Oil is trading today at the highest level since September 2008 due to Middle East supply risk, moving above $105 a barrel. In addition, signs for a recovery of the U.S economy will raise speculation and fuel demand will rise.  Gold (XAU) fell by 0.15% and closed above $1432.30 as a result of investors who are taking profits at these record high levels. Earlier today, the yellow metal reached a new record high of $1,445.70. No economic data is expected today.

Euro (EUR) – The euro fell against the dollar after Moody's ratings agency cut Greece's credit rating by three notches to B1 from Ba1. The pair reached a 4 month high at 1.4035 as a result of President, Trichet’s words on a possible rate hike on April last week. Holding above its strong support level of 1.3960 might push the pair back to 1.4000 zones. But for the short term it is seems like the pair is heading for a bearish trend and we will be able to see it again at 1.3850. Overall, EUR/USD traded with a low of 1.3840 and with a high of 1.4035. Today, Deutsche Bundesbank President, Axel Weber is expected to speak in Frankfurt and German Factory Orders are expected to get higher by 2.60% vs -3.40% previously.

EUR/USD – Last:  1.3965

British Pound (GBP) – The pound fell against the greenback for the second day, though The Bank of England will leave its benchmark interest rate unchanged at a record low for the coming week, as policy makers hold off tackling inflation as concerns mount about the strength of the recovery. The trend is bearish and the pair will test its support at 1.6150. Overall, GBP/USD traded with a low of 1.6180 and with a high of 1.6340. Today, BOE Governor, Mervyn King Weber is expected to speak.

GBP/USD - Last: 1.6194

Japanese Yen (JPY) – The Yen strengthened against the U.S Dollar as stocks fell and commodities gained, boosting demand for haven assets. It seems like the pair will again test its support level of 82.00. Overall, USD/JPY traded with a low of 81.90 and with a high of 82.37. Earlier today, the Current Account came out worst than expected at 1.10T vs 1.52T previously. Tomorrow, Core Machinery Orders are expected to show a growth of 2.80% vs 1.70% previously.

USD/JPY-Last: 82.34

Canadian dollar (CAD) – The Canadian dollar traded mostly unchanged against the US dollar in a tight range of 42 pips, fluctuating around the 0.97 zones and attempting to determine a further trend. Holding above the support level of 0.9700 might rebound the pair back to parity. But, if Oil prices will keep going up, the pair will probably will break it strong support of 0.9700. Overall, USD/CAD traded with a low of 0.9700 and with a high of 0.9742. Canadian building permits surprised analysts’ expectations and declined by 5.1% over January, following a growth of 2.6% the month prior. Today, housing starts are expected to grow by 170K vs 170K previously.

USD/CAD - Last: 0.9734