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UFXBank Forex News: Euro Drops as Risk Appetite Wanes

Written by article default Monday, 27 June 2011 07:11

USD Dollar (USD) – The dollar strengthened in forex trading against most of the major currencies due to a decline in risk appetite among investors over high concern for Greece’s debt crisis. In addition, Orders for durable goods climbed by 1.90% more than forecast in May, signaling that manufacturing may be one of the first areas of the U.S. economy to rebound from a first-half slowdown in growth, despite Federal Reserve member, Fisher statements. He said that he sees economic growth picking up in the second half, while remaining slow, and the Fed sustaining its record asset holdings for an “appropriate” period. It’s a slow recovery and it’s going to continue to be slow.  The Stock Markets closed the week negative as the Dow Jones fell by 0.96% and the NASDAQ lost 1.26%.  Crude oil dropped by 0.40%, closing at $90.60 a barrel. Oil dropped on concern that slowing U.S. economic growth will reduce demand and the International Energy Agency’s announcement of the release of 60 million barrels to the market. Gold (XAU) had its largest one day drop in seven weeks by 1.25%, closing at $1,501 an ounce. The dollar has eroded the allure of gold as an alternative investment and a tumble in energy costs this week have reduced demand for the metal as an inflation hedge. Today, Personal Spending m/m is expected to rise by 0.20% vs. 0.40% previously.

Euro (EUR) – The euro fell against the U.S Dollar on speculation that a Greek austerity plan and a European Union pledge to stabilize the region’s economy won’t resolve its sovereign-debt crisis. In addition, if Greece’s parliament does not approve a package of austerity measures this week, the euro will continue to struggle against the US Dollar. Trading below the resistance level of 1.4200 will keep the momentum negative to for the pair, but if the pair breaks above this resistance level, it might reach 1.4400 again. Overall, EUR/USD traded with a low of 1.4126 and with a high of 1.4441. Today, no economic data is expected.

EUR/USD – Last: 1.4130

British Pound (GBP) – The Pound fell against the Greenback amid speculation that the Bank of England will keep interest rates at a record low to counter faltering growth. In addition, Bank of England Governor, King said the euro-area debt crisis poses the biggest risk to the stability of the U.K. financial system and didn't provide any reason for traders to buy the Pound again. The trend for the pair is bearish if the pair maintains its resistance level of 1.6020. Overall, GBP/USD traded with a low of 1.5940 and with a high of 1.6262. Today, no economic data is expected.

GBP/USD - Last: 1.5930

Japanese Yen (JPY) – The dollar strengthened against the yen after the pair didn't succeed to break its support level of 80.00 and a stronger Dollar prevailed. If the pair will succeed to break its resistance of 80.80 it may bring the pair to 81.20, its next resistance level. Today, no economic data is expected.

USD/JPY-Last: 80.70

Canadian dollar (CAD) – The Canadian Dollar fell against its U.S. counterpart as risk-averse investors sought refuge in the most liquid of assets, the U.S. dollar. In addition, the Canadian Dollar slid after futures on crude oil, Canada’s largest export, fell below $90 a barrel yesterday for the first time since February. Today, no economic data is expected.

USD/CAD - Last: 0.9900