Daily Forex Overview

Previous session overview

On Wednesday, the dollar fell back versus its rivals on tough talk from the European Central Bank and ongoing financial market concerns.

The Euro was able to regain some ground against the Dollar yesterday although mixed data and sluggish oil capped gains. First quarter GDP for the Euro zone was revised lower to 0.7% and the German Trade balance came in lower than expected at 14.4 Billion. EURUSD traded with a low of 1.5650 and a high of 1.5750 before closing the day at 1.5740.

Pound had a good day gaining against most currencies in surprising moves higher given recent poor data and the Bank of England rate decision. May's trade balance came in near forecasts at -7.49 Billion. GBPUSD traded with a low of 1.9674 and a high of 1.9820 before closing the day at 1.9819.

On Wednesday, USDJPY copied the price action in other dollar cross rates. An early spike lower was reversed on the better stock market performance in Europe but later in the session resurfacing credit woes and the sell-off on the US stock markets caused USDJPY to make a step backward again. The pair closed the session at 106.76.

Australian dollar rose sharply to USD0.9612 from USD0.9554 after Australian jobs data came in much stronger than expected.

Market expectation

The euro is on the defensive Thursday, with sell orders awaiting any upward move to USD1.5750.

Tokyo dealers expect the euro to rise back to USD1.5800 soon, as lingering fears for the U.S. banking system and economy weigh on the greenback.

Market participants are now focused on remarks from Federal Reserve Chairman Ben Bernanke, who is scheduled to testify on financial market regulation in Congress later in the day.

Very strong USDJPY bids stand at 106.70, players short-squeezed as many caught short by AUDJPY, which spiked to 102.60 from 102.00, on better-than-expected Australia June jobs data. USDJPY is now very firm as many players are short-squeezed.

US data sees the weekly jobless with expectation to rise 11,000 to 415,000 in the July 5 holiday week.

Analysts saying that number of employed rose 29,800 in June compared with expected gain of 7,500 and that leaving the open possibility of a further rate hike by the Reserve Bank of Australia in August.

Most important events of the day