UFXBank Forex News: GBP, USD Strengthen on Killing of OBL | Learn Forex | GoLearnForex.com

UFXBank Forex News: GBP, USD Strengthen on Killing of OBL

Written by article default Tuesday, 03 May 2011 07:31

USD Dollar (USD) – The dollar advanced in Forex trading versus most of the major currencies as Interpol told its 188 member countries to be on “full alert” following the death of the al-Qaeda leader in Pakistan.  There seems to be worries over retaliation terrorist attacks. In times like this, the US Dollar seems to be a safety haven for investors. In addition to this development, a report showed that U.S. manufacturing cooled in April to a pace consistent with steady growth in the industry that’s leading the expansion. The manufacturing index fell to 60.4 last month from 61.2 in March. A Figure greater than 50 signals expansion. On the other hand, however, the Fed is expected to hold its benchmark interest rate at zero to 0.25 percent, where it’s been since December 2008 until the first quarter of 2012. While a weaker dollar may signal waning confidence in the U.S., it may also help President, Barack Obama reach his goal of doubling exports by 2015 and reducing unemployment. It is important to mention that the reason for the limited volatility today could be explained on the partial closure of financial centers due to holidays. The Stock Markets closed the week negative as the Dow Jones fell by 0.2% and the NASDAQ lost 0.33%. The Nasdaq composite index is still struggling to consolidate at 10-year highs. Crude Oil fell by 0.36% and closed at $113 a barrel due to a brief US dollar rebound earlier today.  Gold (XAU) fell by 0.20% and closed at $1,544 an ounce after testing once again an all-time record of $1576 an ounce. After a big run, it wouldn't be surprising to see a pause or pullback for Gold. Today, Factory Orders are expected to rise by 1.90% vs. -0.10%   previously.

Euro (EUR) – The euro traded unchanged against the U.S Dollar after reaching highest level since Dec. 2009, which came after hitting 1.4901 earlier today. The pair rose due to speculation that the Federal Reserve will keep interest rates low as the European Central Bank raises its benchmark. In addition, the ECB, which meets May 5, raised its benchmark interest rate to 1.25 percent on April 7 from a record low of 1 percent. Some economists expect it to signal another move that could come as soon as June. The pair is testing its resistance at 1.4900. Trading above the support level of 1.4750 keeps the momentum positive for the pair, but 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 1.4901. Today, the PPI is expected to rise by 0.70% vs. 0.80% previously.

EUR/USD – Last: 1.4800

British Pound (GBP) – The Pound fell against the Greenback due to emotionally led trading on the killing of Osama Bin Laden.  Markets in the U.K. were closed today for a holiday. The fact that the resistance level of 1.6580 provides support now is a bullish sign.  But, if the support breaks, it could fall back to 1.6520. Overall, GBP/USD traded with a low of 1.6430 and with a high of 1.6742. Today, the Manufacturing PMI is expected to be released at 57.0 vs. 57.1 previously. CBI Realized Sales are expected to grow to 14 vs. 15 previously.

GBP/USD - Last: 1.6590

Japanese Yen (JPY) – The dollar strengthened against the yen on speculation that Federal Reserve officials speaking this week will reiterate their intention to keep interest rates low to stimulate economic growth. In addition, the Bank of Japan raised its growth forecast for next year on optimism that the economy will bounce back on reconstruction work and restored power supplies. The central bank announcements support the local currency against the US Dollar. The trend for the pair is still bearish and its support of 80.70 will likely break down, which may bring the pair to 78.00 levels. Today, Japanese banks will be closed in observance of Greenery Day.

USD/JPY-Last: 81.05

Canadian dollar (CAD) – The Loonie declined against the US Dollar due to today’s election. Canada’s dollar slid from almost the highest level in more than three years on speculation that the New Democratic Party will deny Conservatives a majority as Canadians vote today. But still, the US Dollar lost momentum particularly against commodity currencies as commodity levels remain high. The RMPI increased 5.7 percent, the fastest since June 2009, as crude oil rose. Today, no major economic data is expected.

USD/CAD - Last: 0.9470