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UFXBank Forex News: GBP Strengthens as Trade Deficit Narrows

Written by article default Thursday, 10 March 2011 08:29

USD Dollar (USD) – The Dollar was mixed against the other major currencies of Forex trading as oil prices declined but concerns remained regarding unrest in the Middle East. There was also good data from the euro zone and from the UK, which caused the Dollar to be inconsistent. The NASDAQ weakened by 0.51% and the Dow Jones by 0.01% respectively. Crude oil declined by 0.6%, closing at $104.38 a barrel. Gold (XAU) fluctuated during the day, and in the end, closed almost unchanged at $1430.20 an ounce. Today, the Trade Balance is expected at -41.4B vs. 40.6B prior, and Unemployment claims are expected to rise from 368k to 375k.

Euro (EUR) – The Euro fluctuated against the Dollar during the European session after Portugal successfully sold 1 billion Euro worth of two year bonds with a yield of 5.9% up from 4.0% since last September. Also, German industrial production came out positive (1.8% vs. -0.6% prior) and caused the Euro to rise up to 1.3940. By the end of the day, the Euro stayed stable and closed almost unchanged after struggling all day at the 1.3900 level. The EUR/USD’s momentum is still bullish, and as long as the pair is trading above 1.3850 and above the 10 moving average on the daily chart, the Euro is more attractive. Overall, EUR/USD traded with a low of 1.3855 and with a high of 1.3942. Today, the ECB monthly bulletin will be released.

EUR/USD – Last: 1.3885

British Pound (GBP) – The Pound strengthened against the Euro and the Dollar after a report showed that the nation’s trade deficit narrowed more than economists had forecast in January, as exports rose to a record level ( came out at -7.1B vs. -8.5B forecast). The GBP/USD is struggling with a serious level (1.6200) and if the pair crosses and stays above this level, the pound will become bullish again. Overall, GBP/USD traded with a low of 1.6136 and with a high of 1.6243. Today, the interest rate decision is expected to remain unchanged at 0.5%, and Manufacturing Production is expected to become positive from -0.1% to 0.8%.

GBP/USD - Last: 1.6182

Japanese Yen (JPY) –The Yen was mixed versus the other major currencies as demand for safety assets declined after positive data from Europe and England supported higher yielding investments. The USD/JPY’s support on the 4 hours chart is at 82.50, and if the pair breaks below this level, the Dollar will probably continue to decline towards 82.00 or even more. Overall, USD/JPY traded with a low of 82.58 and with a high of 82.93. No economic data is expected today.

USD/JPY-Last: 82.87

Canadian dollar (CAD) – The Canadian Dollar strengthened to the highest level since November 2007 versus the US Dollar as the Bank of Canada sold $3 billion of two year bonds at an average yield of 1.867 percent - more than double the yield available on comparable U.S. Treasuries.  As long as the pair is trading below 0.9800 levels and below the 10 moving average on the daily chart, a short position is preferred. Overall, USD/CAD traded with a low of 0.9667 and with a high of 0.9715. Today, the Trade Balance is expected at 2.5B vs. 3.0B prior.

USD/CAD - Last: 0.9701