News eur/usd

[Mikhail Kurakin]

Analytical department of the company LiteForex.

On Monday morning, despite recent strengthening of european currency, EUR was traded 1.486-1.490 dollars, having no chance to get higher that 1.4900 because the interest to USD. Dollar grows today against major currencies, and the short-term ascending trend of US dollar is not something outstanding. The only exception today is yen which partially wins back Friday’s shameful falling.

On Monday dollar is also supported by positive macroeconomic data on labour market, showing 20% against 10.2% earlier. Together with the USA labour market indicators (-11 thousand unemployed) investors have acted against former practice - they began to buy dollars. Apparently, owing to market optimism the Fed has reviewed its intentions concerning interest rate: at first it was expected to increase not earlier than 2012 but now it is predicted to happen in the middle of 2010.

Friday’s data on labour market should not be overestimated though – it was a first silver lining, a sign of recovery but still each tenth American has no job. Therefore preliminary interest rate increase is quite doubtful, as there are still problems with labour market. In addition, we shall stress, that the Fed is unlikely to embark on loose monetary policy soon - after all it is very convenient for the economy in current conditions of falling consumer demand, low inflation and absence of price pressure. Hence, the conclusion might be as follows: dollar will remain cheap for some time as its growth today was nothing else but great expression of investors’ optimism.

Today in second half of day the number of speculative transactions in the currency market can grow, as for lack of any significant macroeconomic statistics, hence, traders will cautious about performance of Mr. Bernanke, the head of the Fed, at 20:00, Moscow time. But the dollar is unlikely to break through 1.4720-1.4850 even if Bernanke’s speech is very encouraging.
Now it seems obvious that dollar’s growth this Monday is a temporary reaction; on the other hand in the next six months Euro will show substantial growth.

 

[Mikhail Kurakin]

Forex: News from Dubai support the euro and pound, dollar awaits Fed meeting

Start a new week for a single European currency in the forex market (Forex) has seen good: this morning during the Asian session, the euro strengthened against the U.S. dollar against the backdrop of news from Dubai. So, on Monday became aware of the fact that Abu Dhabi would not be killed neighbor and will allocate 10 billion to repay debt Dubai World.

Note that it is today, the deadline for repayment of Islamic sukuk bonds, which amount to the Dubai World $ 4.1 billion and payments now will be to repay debt Nakheel worth $ 3.52 billion remaining funds will be used for current expenses, such as: payments percent of the current replenishment of working capital, repayment of debts to suppliers and contractors.

The news certainly is positive, and this is clearly visible on the euro and the pound sterling on forex. As of 10:00 GMT, the euro is worth 1.4662, and today the currency is likely to be bargaining in the corridor 1.4650-1.4750. We remain of the view that the rise of the dollar, observed last week, short-term nature and the potential uptrend for the EUR has not been exhausted - in favor of the shows today and the technical picture of the auction.

It is obvious that today, as on Tuesday, investors are unlikely to make sudden movements in the currency market on the eve of Wednesday, the Federal Reserve System, its decision on rates and follow-up comments. Of interest are the comments it is because the level of rates will remain at current levels. In the words of representatives of the Federal Reserve traders will look for hints of a possible collapse of mitigation policies, as well as the direction of the future monetary policy.


Analytical Division LiteForex.

 

[Mikhail Kurakin]

Forex: euro traded above 1.37 on a favorable external background

A single European currency early on Wednesday, continues to gain strength: investors seem to be so far paid no attention to the subject of Greece and again today believe in the quick recovery of the world economy.

By 10:30 GMT, the euro is worth 1.3742 against the level of 1.3770 yesterday, was slightly reduced at the moment after rising almost a figure for the last day.

Before, we noted that the previously oversold euro needs a correction, but how extensive it will be until early to judge, and noted that in order to uptrend euro was stable currency to gain a foothold above 1.3855 level - then we will talk about the medium-term reversal trends. We must also remember that after a slight recovery is not ruled out another reduction in the euro to new local minima and testing of 1.3450 marks. It is also worth to note that the euro on the forex market was open a lot of short trading positions - to shut them down now and will facilitate the strengthening EUR. In addition, events in Greece, where trade unions cancel strike over pay cuts and jobs were perceived by traders as a positive sign that the cuts in government spending will be held in the country is soft and will lead to the desired result.

Today in the market expect the publication of statistics on the rate of new housing in the U.S. - according to forecasts, the rate will increase compared with the levels in December by 4.1%, which should support the dollar.

Today, most likely, the pair EUR / USD will trade in the range of 1.3640-1.3820.