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Daily Forex Overview

Fri, Jul 11 2008, 07:47 GMT
by Raivis Zile

Dukascopy Swiss FX Group

Previous session overview

On Thursday, the dollar posted a decline against the euro after Federal Reserve Chairman Ben Bernanke warned of "ongoing" financial market turmoil.

The euro was hit yesterday after data showing French industrial production dropped much more sharply than expected in May, sunk by downturns in the automobile and energy sectors. Later Euro gained against the USD as surging oil and comments from US officials supported. EURUSD traded with a low of 1.5691 and a high of 1.5803 before closing the day around 1.5780.

The Bank of England meeting was boring as interest rates were left unchanged at 5 percent. The lack of a surprise statement or a rate cut came as a relief to some pound traders who were hoping for the impossible move by the BoE. The cable started to drop before the announcement and fell to 1.9712 versus the dollar in U.S. morning, and renewed buying interest lifted sterling and pound was able to recover losses and closed at 1.9780.

The Japanese yen continues to trade within recent ranges, with sharp moves capped by increasing oil prices. USDJPY fell about 40 pips on the Iran/oil news to around 106.80 but overall the yen was little changed. USDJPY traded with a low of 106.70 and a high of 107.40 before closing the day around 107.20.

The Canadian dollar was little changed against the U.S. dollar, as traders bided their time ahead of the key domestic jobs report due on Friday and next week's Bank of Canada rate announcement, where forecast is that rates will remain steady at 3%.

The Australian dollar ended little changed against the U.S. dollar Friday in Asia, but gained against the yen on improving investor risk appetite.

Market expectation

EURUSD falls but likely supported near 1.5730 as strength of euro is l still dominating; now at 1.5772. (SWFX)

For EURUSD bids seen placed between USD1.5760/50 and break below can open a deeper move toward USD1.5730.

Market thinking that next move in UK rates will be down.

For pound offers remain in place toward USD1.9800 and break above can open a move on toward USD1.9815/25, stronger interest between USD1.9835/50.

There will be no Euro zone economic data due for release today, which means that the price action of the currency pair will depend upon US data and the fluctuations in the Dow.

Traders will also turn to reports from Canada on Friday, consisting of May trade balance, and the June labor report. The unemployment rate is expected to remain unchanged at 6.1% while the employment change is seen increasing to 10.0k from 8.4k.

Most important events of the day

Published on  Fri, Jul 11 2008, 07:53 GMT