Pound Strengthens Against Dollar | Learn Forex | GoLearnForex.com

Pound Strengthens Against Dollar

Written by article default Wednesday, 20 July 2011 15:53

USD Dollar (USD) – In forex trading, the dollar fell against most of the major currencies amid increased risk appetite among investors. President Barack Obama embraced a $3.7 trillion debt-cutting plan by a bipartisan group of senators that would combine tax increases and spending cuts, saying it could end a congressional deadlock over raising the U.S. borrowing limit. His remarks spurred optimism that lawmakers can reach an agreement deal that would cut the U.S. budget deficit and avoid default. In addition, U.S. housing starts increased by 0.63M, more than the forecast of 0.62M, to the fastest pace in five months. The Stock Markets closed positive as the Dow Jones rose by 1.63% and the NASDAQ gained 2.22%. The main reason is a combination of good corporate earnings and the market is looking for a relief rally after the debt-ceiling and deficit negotiations. Crude oil rose for the second day in a row by 2.08%, closing at $98.10 a barrel as investors bet that shrinking stockpiles and signs of economic recovery in the U.S. indicate that fuel demand will increase in the world’s biggest crude-consuming nation. Gold (XAU) declined from an all-time high by 0.90%, closing at $1,590 an ounce, on investor sales after the metal’s longest rally in 31 years. Gold may continue to gain as European and US leaders won't likely see a return of confidence among investor within their economies. Today, Existing Home Sales are expected to rise by 4.92M vs. 4.81M previously and Crude Oil Inventories are expected to fall by -1.5M vs. -3.1M previously.

Euro (EUR) – The euro strengthened against the U.S Dollar as a result of increased risk appetite among investors. European Union leaders are preparing for a summit on July 21 to hammer out a solution to the Greek debt crisis. The Euro strengthened despite statements by German Chancellor Angela Merkel who said that Europe’s sovereign crisis can’t be fixed “in one step,” damping expectations that government leaders can resolve the region’s debt woes at a July 21 summit. 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 levels again. Overall, the EUR/USD traded with a low of 1.3836 and with a high of 1.4281. Today, German PPI m/m is expected to grow by 0.10% vs. 0.0% previously.

EUR/USD – Last: 1.4160

British Pound (GBP) – The Pound strengthened against the greenback after the pair didn't succeed to break its support of 1.6060. The trend for the pair remains bearish if the pair is able to maintain its resistance level of 1.6160. However, if the pair breaks that resistance, it may reach 1.6300. Overall, the GBP/USD traded with a low of 1.5901 and with a high of 1.6191. Today, MPC Meeting Minutes are expected to be released.

GBP/USD - Last: 1.6130

Japanese Yen (JPY) – The dollar strengthened against the Yen as President Barack Obama endorsed deficit-cutting measures proposed by a bipartisan group of senators, easing concern the U.S. is moving closer to default. If the pair succeeds in breaking its resistance level of 79.60, it may bring the pair to the 80.00 resistance level once again. Tomorrow, the Trade Balance is expected to decline by -0.25T vs. -0.47T previously.

USD/JPY-Last: 79.15

Canadian dollar (CAD) – The Canadian Dollar strengthened to the strongest level in 11 weeks against its U.S. counterpart after the Bank of Canada kept its main interest rate unchanged and said borrowing costs will increase as the economy recovers. In addition, crude oil’s rise provided additional support for the Loonie, and the trend for the pair remains bearish. Today, the BOC Monetary Policy Report is expected to be released and the Bank of Canada is expected to hold a press conference.

USD/CAD - Last: 0.9505