US dollar fell against the yen due to poor US economic data | Learn Forex | GoLearnForex.com

US dollar fell against the yen due to poor US economic data

Written by article default Monday, 11 July 2011 15:18

USD Dollar (USD) – In forex trading, the dollar traded mixed against most of the major currencies due to a decline in risk appetite among investors and negative economic data. The Non-Farm Payrolls grew at the slowest pace in nine months as the Unemployment Rate climbed. The Unemployment Rate rose to 9.2 percent, the highest level this year. In addition, Treasury Secretary, Geithner said yesterday that the Obama administration wants the most comprehensive deficit-cutting deal possible and reiterated that failing to raise the debt limit could have “catastrophic” consequences. Geithner said Congress has no alternative to raising the debt limit and there are no “constitutional” delays available. A default resulting from failure to raise the ceiling could do “catastrophic” damage to the U.S. economy. The Stock Markets closed the week negative as the Dow Jones fell by 0.49% and the NASDAQ lost 0.45%.  Crude oil dropped for the first time in two weeks by 2.70%, closing at $95.90 a barrel. The main reasons for this are that the U.S. added fewer jobs than forecast in June and the Unemployment Rate climbed, damping optimism for an economic rebound and growth in fuel demand. Gold (XAU) rose by 0.75% and closed at $1,542 an ounce as investors ran to safety assets after much-weaker-than-expected US employment figures and Moody’s Investors Service cut Portugal’s credit rating. Gold may continue to gain as debt concerns in Europe and the U.S. spur demand for the metal as a protection of wealth, a survey found. Today, no economic data is expected.

Euro (EUR) – The euro fell against the U.S Dollar as Moody’s Investors Service cut Portugal’s government bond rating to junk and European banks faced more stringent stress tests. In addition, there is high concern about Italy’s economy after shares of Italy’s biggest banks fell to the lowest level in more than two years and government bonds dropped, driving 10-year yields to a nine-year high. Trading below the resistance level of 1.4270 will keep the momentum negative for the pair, but if the pair breaks above this resistance level, it might reach 1.4450 again. Overall, EUR/USD traded with a low of 1.4196 and with a high of 1.4465. Today, no economic data is expected.

EUR/USD – Last: 1.4210

British Pound (GBP) – The Pound strengthened against the Greenback due to a positive PPI which rose by 0.40% vs. 0.10% forecast. The trend for the pair is still bearish if the pair maintains its resistance level of 1.6070. Overall, GBP/USD traded with a low of 1.5931 and with a high of 1.6077. Today, no economic data is expected.

GBP/USD - Last: 1.6020

Japanese Yen (JPY) – The dollar fell against the yen due to poor economic data from the states. In addition, Japan's Money Supply M2 rose to 2.9% vs. 2.7% previously. If the pair succeeds to break its support level of 80.50 it may bring the pair to 80.00, its next support level. Tomorrow, The Bank of Japan begins a two-day policy board meeting.

USD/JPY-Last: 80.70

Canadian dollar (CAD) – The Canadian Dollar fell against its U.S. counterpart on speculation that the U.S. economic recovery will slow in the coming months. These concerns also come amid heightened worries that the European debt crisis may spread further. The Canadian economy’s main export is oil, and if the global economy will slow down, it will damage the local economy severely.  Today, Housing Starts are expected to grow by 182K vs. 184K previously and the BOC Business Outlook Survey is expected to be released.

USD/CAD - Last: 0.9625