USD Reaches 14 Month Low
UFXBank Research from UFX Bank at 10/11/09
Daily Review 09/10/2009
USD Dollar (USD) – The Dollar reached a 14 month low against all majors after continuous signs of global recovery increase investors' appetite for risk. Adding to that was the U.S. Initial Jobless Claims that decreased to 10-Month Low of 521,000 and pushed the investors to higher yielding assets. NASDAQ and Dow Jones rose by 0.64% and 0.63% respectively. Crude oil jumped by 3%, closing at 71.69$ a barrel on the back of the Dollar's weakness and despite an increase in oil and gas inventories. Gold (XAU) reached to a new record high of 1060$ but closed lower at 1055$ an ounce. Today, Trade Balance is expected to slightly decrease from -32.0B to -32.8B.
EURO (EUR) –The Euro reached new yearly highs against the Dollar after European Central Bank President Jean- Claude Trichet signaled the bank will keep interest rates at a record low to stimulate growth as the euro’s appreciation threatens to undermine the economic recovery, interest rate released and remain at 1%. All in all, EUR/USD traded with a low of 1.4681 and with a high of 1.4816 Today, French Industrial Production is expected to slightly rise from 0.1% to 0.3%.
EUR/USD - Last: 1.4730
Resistance 1.4773 1.4796 1.4814
Support 1.4704 1.4682 1.4657
British Pound (GBP) – The Pound joined other majors and rose against the Dollar after the BOE kept the interest rate at its current 0.5% rate and decided to keep spending the remainder of its 175 billion-pound bond- purchase program. Overall, GBP/USD traded with a low of 1.5947 and with a high of 1.6120. Today, PPI Input is expected at -0.9% vs. 2.2% prior, Trade Balance is expected at -6.3B vs. -6.5B prior.
GBP/USD - Last: 1.6033
Resistance 1.6024 1.6118
Support 1.5925 1.5860
Japanese Yen (JPY) –The Yen continued to rise versus the Dollar after Japan's service sector sentiment rose to 43.1 in September. Overall, USD/JPY traded with a low of 88.14 and with a high of 88.71. Core Machinery Orders came out worse than expected at -0.5% vs. 2.2% forecast. No economic data expected today.
Resistance 89.41 89.96 90.37
Support 88.62 88.15
Canadian dollar (CAD) – The Canadian Dollar touched the strongest level in more than a year amid speculation a global recovery may quicken as stocks and commodities rose. Overall, USD/CAD traded with a low of 1.0504 and with a high of 1.0630. Today, Employment Change is expected at 4.9K vs. 27.1K prior, Unemployment Rate is expected at 8.8% vs. 8.7% before and Trade Balance is expected at -0.9B vs. -1.4B prior.
CAD/USD - Last: 1.0540
Resistance 1.0614 1.0645 1.0691
Support 1.0532 1.0505