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Forex Daily News: Euro Bounces Back from 7-week Low

Written by article default Wednesday, 13 July 2011 13:02

USD Dollar (USD) – In forex trading, the US Dollar fell against most of the major currencies due to the FOMC Meeting Minutes. A few members pointed out that if economic growth becomes too slow, more stimulus would be needed. In addition, the US Congress is in talks aimed at raising the $14.3 trillion U.S. debt ceiling before Aug. 2, the date when the U.S. government is projected to exhaust its borrowing authority. In a speech made earlier today by treasury Secretary Geithner, it was said that raising the debt limit can be approved later on this week. The Stock Markets closed negative for the third day as the Dow Jones fell by 0.47% and the NASDAQ lost 0.74%.  Crude oil climbed the most in two weeks by 1.70%, closing at $96.60 a barrel. The rise in crude oil is due to the European government's talks to halt the region’s credit crisis. In addition, U.S. crude oil inventories will probably drop 1.5 million barrels today. Gold (XAU) rose by 1.03% and closed at $1,568 an ounce as Europe’s escalating debt crisis boosted demand for the metal as a haven investment. 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, Fed Chairman Bernanke is expected to testify and the Federal Budget Balance is expected to show -68.0B vs. -57.6B previously.

Euro (EUR) – The euro strengthened a bit from a seven-week low against the U.S. after Italian PM Berlusconi called for his and opposition parties to accept the austerity programs and also emphasized that his government will run a primary budget surplus this year. However, the European Union is still looking for some type of solution. Trading below the resistance level of 1.4020 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 1.3836 and with a high of 1.4465. Today, the Industrial Production m/m is expected to grow by 0.50% vs. 0.20% previously.

EUR/USD – Last: 1.3990

British Pound (GBP) – The Pound strengthened against the U.S. Dollar after testing its support at the 1.5770 level earlier today, despite the lower CPI, which came out weaker than expected. The trend for the pair will be still bearish if the pair maintains its resistance level of 1.6000. Overall, GBP/USD traded with a low of 1.5778 and with a high of 1.6077. Today, the Claimant Count Change is expected to grow by 15.1K vs. 19.6K previously, and the Average Earnings Index is expected to grow by 2.0% vs. 1.80% previously.

GBP/USD - Last: 1.5930

Japanese Yen (JPY) – The U.S. dollar fell against the Yen as Federal Reserve policy makers disagreed on whether additional monetary stimulus will be necessary to support economic growth. If the pair succeeds in maintaining its support level of 80.00, it may bring the pair to the 79.10 support level once again. Today, the Bank of Japan is expected to release a statement regarding its Monthly Report.

USD/JPY-Last: 79.40

Canadian dollar (CAD) – The Canadian Dollar strengthened against its U.S. counterpart as stocks and commodities such as crude oil advanced on speculation that debt concern in Europe may ease, making higher-yielding currencies more attractive. The trend for the pair is still bearish. Today, no economic data is expected.

USD/CAD - Last: 0.9630