Euro extends its loss against the US dollar to a six-month bottom
The US dollar expanded its rally to six-monthshigh against the euro on Monday, boosted by another drop in crude oil prices to $114 per barrel. Declining oil prices helped ease worries about the impact of higher energy costs on the US economy and also helped boost demand for the greenback. The euro continued to be under serious pressure after ECB’s President Trichet last week provided a pessimistic economic growth forecast for the eurozone growth. The speech rose investors’ expectations that next ECB rate move will be to lower rates rather than raise them. Data released in the eurozone saw German July wholesale prices up 1.4% m/m and 9.9% y/y.
The British pound continued to weaken against the US dollar and even reached its lowest level since November 2006. The negative pressure came form the economic data released during the day that fueled speculations Bank of England’s Monetary Policy Committee will be forced to reduce the interest rate very soon. The data released in UK saw June output prices up 0.4% m/m and 10.2% y/y, their highest annual rate since 1986 but below expectations. Input prices were down 0.6% m/m and 30.1% y/y. June trade deficit widened to ₤7.7 billion.
The yen finally managed to advance versus the US dollar, after its poor performance during the last couple of days. The Japanese currency was supported by the Economy minister Yosano, who reported the government will issue its economic stimulus package details by the end of the month. Still, most traders believe Bank of Japan’s Policy Board will keep the overnight call rate unchanged at 0.50% for the next several months.
EUR/USD
The euro continues to expand its loss against the dollar and trades close to the key support level at 1.4850. Overcoming of this level will open potential for further drop to 1.4700, followed by 1.4525. On the upside, resistance is seen at 1.5000, followed by 1.5150 and 1.5300.
EUR/USD (chart, table)
USD/JPY
The pair consolidates after the significant rise from the previous day. The short term picture remains unchanged and the level at 110.50 continues to show resistance to the upward movement. If broken successfully, next resistances will be 111.20 and 113.40. On the downside, support is seen at 109.10, followed by 107.90 and 107.30.
USD/JPY (chart, table)
GBP/USD
The negative trend for the sterlingremains and the pair moves towards the next short term support at 1.9075. If broken successfully, next supports will be 1.8960 and 1.8885. If the upward movement is resumed, on the upside, resistance is seen at 1.9170, followed by 1.9360 and 1.9530.
GBP/USD (chart, table)
*****
To view the original document, please click on the link below:
http://reports.aiidatapro.com/BBB/Bulbrokers/12.08.2008_FX_daily_review.pdf
*****
Copyright: 2007 STS Finance AD. All rights reserved.
For further Information please contact STS Finance, 1 Chervena Stena Str. , 1421 Sofia
Phone: + 359 2 963 11 38, fax: +359 2 963 09 36, e-mail: research@finance.sts.bg, web site: http://www.finance.sts.bg
*****
AII Data Processing does not endorse in any way, the views, opinions or recommendations expressed above. The use of the Information is subject to the terms and conditions as published by the original source, which you have to read and accept in full prior to the execution of any actions taken in reliance on Information contained herein.
 | SeeNews SeeNews is a business and financial news and information provider which brings its visitors and customers access to detailed coverage on the fast-growing companies, economies and markets of ten Southeast European nations. |
Search for: chart |
12.08.2008 FX daily review.pdf, 202 Kb
