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UFXBank Forex News: Yen Rising on Expected Support for Rebuilding

Written by article default Monday, 14 March 2011 08:14

USD Dollar (USD) – The Dollar was mixed on Friday as Japan’s earthquake caused a big Panic over the world leading investors to prefer the yen on expectations that the value of the Japanese currency would rise as a result of the rebuilding process.  The Yen and Gold are typically seen as a refuge when there is panic on the market. In addition, Michigan consumer sentiment came out worse than expected (68.20 vs. 76.50) and core retail sales came out better than expected (0.7% vs. 0.6%). All of these pieces of news led the Dollar to be unstable. The NASDAQ and Dow Jones increased by 0.54% and 0.50% respectively. Crude oil fell by 1.5%, owing to the earthquake in Japan, which is the second largest importer in the world, and closed at $101.16 a barrel. Gold (XAU) rose by 0.7%, and closed at $1421.80 an ounce. No economic data is expected today.

Euro (EUR) – The Euro advanced versus the Dollar in Forex trading after the region’s leaders negotiated an accord to allow primary market bond purchases that will offer a lifeline to aid recipients in return for austerity commitments. The EUR/USD crossed back over the 1.3850 level on Friday, and therefore, the Euro’s momentum has become bullish again. As long as the rate is above 1.3850, the pair will probably continue to rise towards 1.4000 or even more. Overall, EUR/USD traded with a low of 1.3752 and with a high of 1.3915. Today, Industrial Production is expected to be 0.40% instead of 0.30% last time.

EUR/USD – Last: 1.3931

British Pound (GBP) – The Pound was lower on Friday after the PPI data was released and came out worse than expected (1.1% vs. 1.4%). It showed that U.K. producer prices rose for a fifth month in February, boosted by gasoline and food, which can be a cause of high inflation. In the end of the day, the Pound succeeded to close almost unchanged after a weaker Dollar supported a stronger pound. The next support level of the GBP/USD on the four hour chart is located at 1.5980, and if the pair breaks below this level, the pound will continue to be negative. Overall, GBP/USD traded with a low of 1.5977 and with a high of 1.6087. No economic data is expected today.

GBP/USD - Last: 1.6067

Japanese Yen (JPY) –The Yen rose against the other major currencies as Japan grapples with a possible nuclear collapse caused by its biggest earthquake on record, prompting investors to buy the yen which will be used in order to pay for the rebuilding. The USD/JPY’s momentum is very bearish at this moment due to the Japanese earthquake and the pair will probably be very unstable in the coming days. Overall, USD/JPY traded with a low of 81.65 and with a high of 83.29. Today, Monetary Policy statements will be released and the Interest Rate decision is expected to remain at 0.10%.

USD/JPY-Last: 82.15

Canadian dollar (CAD) – The Canadian dollar gained versus the US Dollar despite oil prices slumping as a result of Japan’s earthquake. As long as the pair is trading below 0.9820 levels, a short position is preferred and the momentum is positive for the Canadian Dollar. The next support level on the four hour chart is located at 0.9680. Overall, USD/CAD traded with a low of 0.9705 and with a high of 0.9802. No major economic data is expected today.

USD/CAD - Last: 0.9731