UFXBank Forex News: GBP/USD Weakens as BoE Opts to Wait on Interest Rate | Learn Forex | GoLearnForex.com

UFXBank Forex News: GBP/USD Weakens as BoE Opts to Wait on Interest Rate

Written by article default Thursday, 24 March 2011 08:03

USD Dollar (USD) – The Dollar rose versus most of the other major currencies after Dallas Fed President, Fisher said today that there was “extraordinary speculative activity in the U.S.” after the central bank pumped record amounts of stimulus into the economy. In addition, the U.S. and its allies attack on Libyan leader Muammar Qaddafi caused investors to sell risky assets and drift towards the Dollar and commodity assets. The NASDAQ rose by 0.54% and the Dow Jones also rose by 0.56%. Crude oil surge to a new two year record of $105.75 a barrel, increasing on the day by 0.7%. Due to the attacks on Libyan leader Muammar Qaddafi’s troops, and protester clashes with government forces in Syria, oil inventories continue to build by 2.1M, but the fundamentals don’t matter right now. Gold (XAU) registered its highest level ever by rising 0.73%, and closing at $1438 an ounce. Today, new U.S. homes unexpectedly declined to 250K VS 301K previously, the lowest level since December 2003, adding to evidence that the industry is floundering. Core Durable Goods Orders are expected to show a growth of 2.1% vs -3.0% previously, and Unemployment Claims are expected to add 388k vs 385K that came from last week’s data.

Euro (EUR) – The Euro slumped in Forex trading against the Dollar after Portugal’s parliament rejected a deficit-cutting plan and European leaders considered pushing back a decision on funding a regional bailout mechanism. The EUR/USD momentum is bearish as long as the rate is under 1.4150. If the pair breaks below this level, the Euro will probably reach again to 1.4250. Overall, EUR/USD traded with a low of 1.4076 and with a high of 1.4247. Today the Flash Manufacturing PMI is expected to become negative from 59.0 to 58.3. The Flash Services PMI is expected to show 56.40, which is lower than the 56.8 seen previously.

EUR/USD – Last: 1.4077

British Pound (GBP) – The Pound weakened against the Green back and other majors after the Bank of England minutes showed policy makers voted 6-3 to keep rates steady on March 10 and saw the “merit in waiting” to assess the effect of higher oil prices on the economy. The GBP/USD’s support on the one hour chart is located at 1.6220, and as long as the pair is trading below 1.6280, the Dollar is more attractive and will probably break the support level. Overall, GBP/USD traded with a low of 1.6218 and with a high of 1.6400. Today, Retail Sales are expected to shrink by -0.5% vs 1.9% previously.

GBP/USD - Last: 1.6240

Japanese Yen (JPY) –The Yen rose against other major currencies on speculation that tensions in the Middle East and North Africa will worsen, boosting demand for the yen as a refuge. In addition, demand for Japanese debt rose as radiation levels at Japan’s Fukushima Dai-Ichi nuclear power plant hampered efforts to repair the reactors. If the pair will break its resistance at 81.10, the trend will be bullish. Overall, USD/JPY traded with a low of 80.69 and with a high of 81.27. No economic data is expected today.

USD/JPY-Last: 80.90

Canadian dollar (CAD) – The Canadian Dollar traded unchanged against the US Dollar as escalating violence in Libya reduced demand for assets related to global economic growth. At the same time, crude oil continued to rise.  The USD/CAD’s support is located at 0.9800, and if the pair breaks below this level, the momentum becomes bearish. Overall, USD/CAD traded with a low of 0.9791 and with a high of 0.9842. No major economic data is expected today.

USD/CAD - Last: 0.9807