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Dollar Falls Against All Majors

Written by article default Thursday, 14 July 2011 15:40

USD Dollar (USD) – In forex trading, the Dollar weakened against all of the other major currencies as Federal Reserve Chairman Ben S. Bernanke said that policy makers will provide economic stimulus if needed. He also reiterated that the Central Bank's stance is that the U.S. economy warrants low rates for an “extended period,” resulting in investor demand for higher yielding assets. The Federal Budget Balance came out better than expected at -43.1B vs. the -68.0B forecast, which supported the demand for higher yielding assets. Wall Street closed positive as the NASDAQ advanced by 0.54% and the Dow Jones by 0.36% respectively. Crude oil rose by 0.6% due to inventories declining more than expected, closing at $98.05 a barrel. Gold (XAU) climbed by 1.5%, closing at $1,585.50 an ounce. Today, Chairman Bernanke testifies and the Retail Sales m/m is expected to come out at 0.00% vs. -0.20%. Core Retail Sales m/m are expected to come out at 0.10% vs. 0.30% prior, and Unemployment Claims are expected to decline from 418K to 413K.

Euro (EUR) – The Euro extended gains against the US Dollar, climbing to a fresh two day high as a result of Bernanke’s announcement. The EUR/USD’s momentum has been bullish over the last two days, and as long as the Euro is trading above the 1.4160 level, it will most likely increase further. Overall, EUR/USD pair traded with a low of 1.3961 and with a high of 1.4242. Today, the ECB Monthly Bulletin, the CPI and the Core CPI are expected to remain unchanged at 2.7% and 1.5%.

EUR/USD – Last: 1.4216

British Pound (GBP) – The Pound was higher versus a weak U.S. Dollar after the release of U.S. data on the Federal Budget Balance and Bernanke’s press conference, which caused higher yielding assets to be more attractive. As long as the GBP/USD is trading above the 1.6080 level, the momentum of the Pound is bullish. The next resistance level on the 4 hour chart is located at  1.6250. Overall, the GBP/USD pair traded with a low of 1.5905 and with a high of 1.6175. No economic data is expected today.

GBP/USD - Last: 1.6145

Japanese Yen (JPY) –The Yen rose against the Dollar as a part of  all-around momentum against the Dollar, which positively affected the Yen. The USD/JPY’s momentum is strongly bearish, and therefore, a short position is preferred. The next support level on the four-hour chart is located at the 78.40 level. Overall, the USD/JPY pair traded with a low of 78.63 and with a high of 79.57. No economic data is expected today.

USD/JPY-Last: 78.61

Canadian dollar (CAD) – The Canadian Dollar strengthened against the U.S. Dollar as Crude oil advanced along with other commodities and stocks, owing to Bernanke’s declaration and causing the CAD to be strong as well. As long as the pair is trading below the 0.9650 level, the momentum of the US Dollar is negative. the next support level on the four-hour chart is located at the 0.9550 level. Overall, the USD/CAD pair traded with a low of 0.9568 and with a high of 0.9645. No economic data is expected today.

USD/CAD - Last: 0.9595