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UFXBank Forex News: Pound Jumps Versus Greenback

Written by article default Thursday, 28 April 2011 07:18

USD Dollar (USD) – The dollar fell against most of the major currencies and dropped to a 16-month low in Forex trading versus the euro due to Ben Bernanke’s press conference. Fed Chairman Bernanke said the central bank’s pledge to keep interest rates low at 0.25% for an “extended period” means he likely will not raise borrowing costs “for a couple of meetings.” The central bank also left the purchasing of government securities, QE2, unchanged .The investment in nonresidential structures is still weak and the housing sector continues to be depressed. In addition, the Fed said that long term inflation expectations have remained stable and measures of underlying inflation continue to be somewhat low despite rising crude oil and commodity prices, while the Committee expects these effects to be transitory. The Stock Markets closed positive as the Dow Jones rose by 0.76% and the NASDAQ rose by 0.78%. Crude Oil jumped by 0.9% and closed at $113.40 a barrel. Gold (XAU) rose to an all time record, closing at $1528 an ounce. The main reason for this high level is that the Federal Reserve will be slow to raise U.S. borrowing costs, weakening the dollar and boosting the appeal of the metal as an alternative asset. Today, the Advanced GDP is expected to rise by 1.90% vs. 3.10% previously and Unemployment Claims are expected to fall to 392K vs. 403K previously. Also, Pending Home Sales are expected to grow by 1.60%% vs. 2.10% previously.

Euro (EUR) – The euro strengthened against the U.S Dollar, reaching its highest level since Dec. 2009 after hitting 1.4770 and advancing for a fifth day against the yen. The Fed announcement that it will maintain the target range for the Fed Fund at record lows (0% - 0.25%) and the speculation that the European Central Bank may raise interest rates, make the Euro much more attractive. Trading above the support level of 1.4800 keeps the momentum positive for the pair, and if the pair breaks below this support level, it might decline to 1.4550. Overall, EUR/USD traded with a low of 1.4492 and with a high of 1.4832. Today, the German Unemployment Change is expected at -33K vs. -55k previously.

EUR/USD – Last: 1.4866

British Pound (GBP) – The Pound strengthened against the Green Back to its highest level since November of 2009 by breaking its strong resistance of 1.6600. U.K GDP rose by 0.50% in its first quarter as services surged the most they have since 2006. In addition, the Federal Reserve announcement and its press conference helped maintain its bullish trend.  If the pair will maintain 1.6600 as a support level, the trend will be bullish. If it manages to break it, it could full back to 1.6520. Overall, GBP/USD traded with a low of 1.6430 and with a high of 1.6563. Today, no major economic data is expected.

GBP/USD - Last: 1.6715

Japanese Yen (JPY) – The dollar fell against the yen due to the Federal Reserve’s reiterating its intention to keep interest rates near zero. After earlier today, the pair didn't succeed to break its resistance at 82.80.  The Bank of Japan will today detail an emergency lending program for banks in the devastated northeastern areas, as a group of lawmakers and former Cabinet ministers presses for more purchases of government bonds. In addition, Asian stocks rose, sending the regional benchmark index to its highest level since February, after the Federal Reserve renewed its pledge to stimulate U.S. economic growth with low interest rates.

USD/JPY-Last: 81.70

Australian dollar (AUD) – The Aussie managed to extend gains versus the US Dollar, breaking above the 1.0850 zone and reaching a fresh 29-year peak at 1.0877, as the Federal Reserve renewed its compromise to stimulate growth with low interest rates stating that inflation is likely to be transitory. The AUD has been also getting stronger due to a rally in gold and positive economic data in the past few weeks. If gold will record new high levels, the trend will remain bullish. Today, no major economic data is expected.

AUD/USD - Last: 1.0940