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UFXBank Forex News: USD Weakens for 2nd Day

Written by article default Wednesday, 18 May 2011 07:25

USD Dollar (USD) – The dollar fell versus most of the major currencies of forex trading for the second day in a row due to weak economic news. Industrial production in the U.S. unexpectedly stalled in April. In addition, housing starts dropped, posing hurdles to a rebound from the first quarter’s economic slowdown. Unemployment at 9 percent and stagnant wages indicate any recovery in housing may take years to unfold. Job growth is essential to household formation and to keep home prices from falling further. The Stock Markets closed mixed as the Dow Jones fell by 0.55% and the NASDAQ gained 0.03%. Crude Oil rose by 0.80%, and closed at $97.70 a barrel. Crude Oil Inventories will probably show that U.S. crude oil inventories climbed to a two-year high last week on data which will probably lower the price of oil. Gold (XAU) lost 0.4% and closed at $1,485 an ounce. Today, FOMC Meeting Minutes are expected to be released and FOMC Member Fisher is expected to speak.

Euro (EUR) – The euro strengthened against the U.S Dollar as European finance ministers tackled the region’s sovereign-debt crisis. In addition, Portugal got the rubber stamp of approval on its 78 billion Euro bailout. European finance ministers, for the first time, floated the idea of talks with bondholders over extending Greece’s debt-repayment schedule, saying that the last rescue attempt has failed to restore the country to financial health. But still, as inflation accelerated, the euro gained and boosted pressure on the European Central Bank to raise interest rates. Trading above the resistance level of 1.4250 will keep the momentum positive for the pair, but if the pair remains below this resistance level, it might fall to 1.4050. Overall, EUR/USD traded with a low of 1.4047 and with a high of 1.4338. Today, no economic data is expected.

EUR/USD – Last: 1.4270

British Pound (GBP) – The Pound strengthened against the greenback for the second day as a report showed inflation accelerated more than forecast in April, prompting investors to bet on higher interest rates. The trend for the pair is bullish if the pair maintains its support level of 1.6220. Overall, GBP/USD traded with a low of 1.6146 and with a high of 1.6516. Today, the Claimant Count Change is expected to rise by 0.4K vs. 0.7k previously and the MPC Meeting Minutes are expected to be released.

GBP/USD - Last: 1.6250

Japanese Yen (JPY) – The dollar strengthened against the yen after the pair succeeded to break its strong resistance of 81.00. The US Dollar showed strength against the yen despite weak economic news from the US. The trend for the pair is bullish. If the pair succeeds to break its resistance of 81.80, it may bring the pair to 82.50, which is the next resistance level. Today, the Prelim GDP q/q is expected to fall by -0.5% vs. -0.3% previously.

USD/JPY-Last: 81.30

Australian dollar (AUD) – The Australian Dollar strengthened against its U.S. counterpart due to the US Dollar weakness. Earlier today, in the RBA meeting minutes, RBA Governor, Stevens announced that the board will leave the cash rate unchanged at 4.75% for a 6th consecutive month and that the country will be in need of higher interest rates at some point to keep a lid on price pressures. The Australian Dollar fell after the announcement, but soared up by 100 pips after. Today, no economic data is expected.

AUD/USD - Last: 1.0640