Dollar Gains Against the Euro and the Pound
UFXBank Research from UFX Bank at 10/12/09
Daily Review 12/10/2009
USD Dollar (USD) – The Dollar gained versus the Euro and the Pound after positive outlook for the economy from Fed's Chairman Bernanke and better Trade Balance than forecast. Trade Balance came out better than expected with -30.7B versus -32.8B forecast, showing an unexpected narrowing in the US trade deficit. NASDAQ rose by 0.72% and Dow Jones gained by 0.8%, Crude rose by 1.09% closing at 72.55$ a barrel, Gold (XAU) weakened by 0.55% closing at 1049.6$ an ounce. Today is a Columbus Day in the U.S and Banks which facilitate the majority of Forex volume will be closed.
EURO (EUR) –The Euro weakened versus the Dollar continuing the momentum from Thursday's Rate Decision and the comments from ECB's President Trichet, saying the Euro's gains versus other currencies lead to volatility and disorderly movements. German Trade Balance came out lower than expected with 10.6B versus 12.4B and French Industrial Production was out better with 1.8% versus 0.3% prior. EUR/USD traded with a low of 1.4672 and with a high of 1.4796. No economic data expected today.
EUR/USD - Last: 1.4705
Resistance 1.4775 1.482 1.4845
Support 1.467 1.465 1.46
British Pound (GBP) – The Pound dropped versus the Dollar as investors think Britain's economy is too weak to consider raising the interest rates and stopping the asset purchasing programs. PPI Input came out better than -0.5% better than -0.9% expected and PPI Output was out with 0.5% better than 0.1% forecast. Overall, GBP/USD traded with a low of 1.5825 and with a high of 1.6077. Today, RICS House Price Balance is expected higher with 15.1% versus 10.7%.
GBP/USD - Last: 1.5830
Resistance 1.5935 1.6005 1.605
Support 1.58 1.577 1.5725
Japanese Yen (JPY) –The Yen declined versus the Dollar and the Euro as speculations remain concerning Japanese government intervention in the currency markets. Core Machinery Orders came out at 0.5% lower than 2.2% expected and -9.3% prior. Overall, USD/JPY traded with a low of 88.35 and with a high of 89.88. The Yearly M2 Money Stock is expected at 2.9% versus 2.8%.
Resistance 90.2 90.4 90.7
Support 89.4 89 88.65
Canadian dollar (CAD) – The Canadian Dollar gained versus the Dollar reaching its highest rate in more than a year as Canadian's Unemployment Rate came out surprisingly lower than expected. Unemployment Rate came out 8.4%, lower than 8.8% expected and 8.7% prior. Employment Change showed employers hired 30.6K workers, higher than 4.9K expected. Overall, USD/CAD traded with a low of 1.0410 and with a high of 1.0551. Today is Thanksgiving Day in Canada and Banks which facilitate the majority of Forex volume will be closed.
CAD/USD - Last: 1.0430
Resistance 1.0485 1.0515 1.055
Support 1.041 1.038 1.033