Pound Strengthens New 3.5-month High Vs. the Dollar | Learn Forex | GoLearnForex.com

Pound Strengthens New 3.5-month High Vs. the Dollar

Written by article default Thursday, 18 August 2011 15:36

US Dollar (USD) – In forex trading, the U.S. Dollar fell against most major currencies due to an increase in risk aversion. In addition, the US PPI rose 0.2% in July, following a -0.4% drop in June. Wholesale costs in the U.S. rose in July, more than was originally forecast. This was led by higher prices for tobacco, trucks and pharmaceuticals, showing that a further decline in commodity expenses has yet to filter to other goods. In the short term, President Barack Obama plans to ask Congress for billions of dollars in unmarked spending to reduce unemployment, while also proposing to take a bigger bite out of the nation’s long-term deficit due to the current U.S. unemployment rate (at 9.1 percent) and slowing economic growth. The Stock markets closed mixed after as the Dow Jones rose by 0.04% and the NASDAQ fell 0.47%. Crude oil rose by 0.45% and closed at $87.40 a barrel. Gold (XAU) strengthened by 0.10% and closed at $1,788 an ounce. The decline of the dollar is increasing demand for all things priced in the currency, such as oil and gold. Today, the Core CPI m/m is expected to grow by 0.20% vs. 0.30% previously. The Unemployment Claims are expected to rise by 402K vs. 395k previously. The Existing Home Sales are expected to grow by 4.91M vs. 4.77M previously and the Philly Federal Manufacturing Index is expected to improve by 4.0 vs. 3.2 previously.

Euro (EUR) – The Euro strengthened against the U.S. Dollar due to an increase in risk aversion. The participants remained hopeful that Merkel and Sarkozy will announce a common Eurozone bond in the near future and, for now, it provides tailwind for the Euro. Trading above the support level of 1.4380 will keep the momentum positive for the pair. Overall, the EUR/USD traded with a low of 1.4323 and with a high of 1.4516. No economic data is expected today.

EUR/USD – Last: 1.4400

British Pound (GBP) – The Pound strengthened a new 3 ½-month high against the greenback, despite the MPC Meeting Minutes, which showed that all members of the policy board voted to keep rates unchanged. The trend for the pair remains bullish if the pair maintains the support level of 1.6440. If that support level is broken, it could reach as high as 1.6150. Overall, the GBP/USD traded with a low of 1.6317 and with a high of 1.6591. Today, the Retail Sales are expected to grow by 0.30% vs. 0.70% previously.

GBP/USD - Last: 1.6520

Japanese Yen (JPY) – The Yen continued to fluctuate against the U.S. Dollar after Japan indicated that it’s ready to intervene in foreign exchange markets again. The USD/JPY has been stuck at the 76.50 - 76.90 levels. After the pair was struggling to break the support level at 76.30, it may increase the option for a bullish momentum. Overall, the USD/JPY pair traded with a low of 76.59 and with a high of 77.09. No economic data is expected today.

USD/JPY-Last: 76.50

Canadian dollar (CAD) – The Canadian Dollar fell against its U.S. counterpart, touching the strongest level in a week, as stocks ended the day higher and crude oil, the nation’s biggest export, rose. The trend for the pair will be bearish if the pair breaks the support level of 0.9780. Today, the Leading Index is expected to grow by 0.30% vs. 0.20% previously and the Wholesale Sales are expected to grow by 0.30% vs. 1.90% previously.

USD/CAD - Last: 0.9800