US Dollar Trades Mixed Against Majors | Learn Forex | GoLearnForex.com

US Dollar Trades Mixed Against Majors

Written by article default Monday, 18 July 2011 15:06

USD Dollar (USD) – In forex trading, the U.S. Dollar traded mixed against most of the major currencies after Moody’s Investors Service and Standard & Poor’s put the U.S. economy under review for a credit downgrade Positive economic data was released from the U.S. where consumer prices, excluding food and energy, increased for a second month, cutting chances of additional stimulus from the Federal Reserve. Federal Reserve Chairman Bernanke told Congress that inflation has moved higher, boosting speculation that the Central Bank won’t take further steps to support the U.S. economy, despite Moody’s warning that state bond ratings would be damaged by a U.S. default. U.S. President Obama and Congressional Republicans are at an impasse over raising the legal debt ceiling. Unless it is lifted, the U.S. will reach the limit of its borrowing authority and begin to default in August. The Stock Markets closed the week positive as the Dow Jones rose by 0.34% and the NASDAQ gained 0.98%.  Crude oil gained by 2.00% and closed at $97.60 a barrel. The main reason for the rise in Crude oil is due to Petroleos Mexicanos, Latin America’s largest oil producer, claiming it shut down 80 oil wells yesterday. Gold (XAU) rose to an all-time high, gaining 0.63% and closing at $1,595 an ounce on growing concern that debt problems in the U.S. will escalate, boosting the appeal of the precious metal as a haven. Gold may continue to gain as debt concerns in Europe and the U.S. spur demand for the metal as a protection of wealth. Today, TIC Long-Term Purchases are expected to rise by 48.4B vs. 30.6B previously.

Euro (EUR) – The Euro declined for a second week against the U.S. Dollar after eight banks failed European Union Stress Tests and Ireland’s credit rating was downgraded by Moody’s Investors Service. The Euro fell despite European Central Bank President Trichet’s quote that, "Europe can surmount its sovereign debt crisis. Naturally the Europeans can manage the issue and it is a question of will and determination”. Trading below the resistance level of 1.4220 will keep the momentum negative for the pair, but if the pair breaks above this resistance level, it may reach the 1.4450 level again. Overall, the EUR/USD traded with a low of 1.3836 and with a high of 1.4281. No economic data is expected today.

EUR/USD – Last: 1.4130

British Pound (GBP) – The Pound fell against the U.S. Dollar after the pair didn't succeed to break its resistance level of 1.6160. The trend for the pair remains bearish if the pair maintains its resistance level of 1.6160. Overall, the GBP/USD traded with a low of 1.5901 and with a high of 1.6191. No economic data is expected today.

GBP/USD - Last: 1.6090

Japanese Yen (JPY) – The Dollar fell against the Yen as equities in Japan are rising, more than any other developed country, on speculation that earnings will improve as the country recovers from its strongest earthquake on record. If the pair succeeds in maintaining its resistance level of 80.00, the pair may test again at the next support level of 78.60. No economic data is expected today.

USD/JPY-Last: 79.00

Canadian dollar (CAD) – The Canadian Dollar strengthened to a two-month high against its U.S. counterpart after Moody’s Investors Service and Standard & Poor’s put the U.S. under review for a credit downgrade. The Fed has kept its benchmark interest rate at a record low of zero to 0.25 percent since December 2008. During that time, the Bank of Canada has raised interest rates three times, to 1 percent. The disparity in the rates spurred investors seeking higher yields to buy Canadian assets instead of those denominated in US dollars. Today, the Foreign Securities Purchases are expected to grow by 7.41B vs. 8.22B.

USD/CAD - Last: 0.9570