Daily Forex Overview

Previous session overview

On Thursday, the yen pared an early rally but remained higher against the dollar, euro and the U.K. pound on persistent worries about global economic growth.

The Euro consolidated above 1.3000 in the Asian session although as stocks weakened in Europe the pair slipped.

Pound came under pressure in the Asian session from US name sales of sterling-yen, taking cable down from USD1.3898 to initial lows at USD1.3830. UK clearer sales of cable then kicked in, taking the pair back on to USD1.37 handle, late Asian dealing seeing the lows extended down to USD1.3720. Meanwhile EURGBP was well supported, recovering off the early stg0.9369 low and climbing back above stg0.9400 in the Asian afternoon.

The Japanese Yen couldn't sustain the levels seen in Asia as weak data and risk aversion pushed most crosses lower.

The Canadian dollar weakened against the dollar with falling oil prices and gloomy economic data. The fall in the price of oil causes the loonie to weaken as it is a major exporter of crude oil.

Weaker stock markets again led the Australian dollar lower in Asia Friday, in thin trade, with sentiment expected to remain weak. The Australian dollar was trading at USD0.6524, from USD0.6576.

Market expectation

The euro is lower Friday as traders cite the likelihood of more weakness for the embattled currency.

Traders said some investors unloaded part of their dollar holdings later as they fretted about comments from the newly minted Treasury Secretary Timothy Geithner that the Obama Administration believes China is manipulating the value of its currency, despite his backing of a strong-dollar policy.

The comments about China fueled a wave of selling in long-dated U.S. Treasury securities amid concern that China may retaliate by unloading its massive amount of government debt holdings. That will raise borrowing costs for the U.S. government, businesses and consumers while further worsening the trade deficit in the U.S.

EURUSD stops hit on the break below USD1.2900 as Thursday's lows give way, with momentum strong enough to take the pair down to USD1.2869 at time of writing. Bids placed around this week's lows at USD1.2830/25 seen as the next target.

Cable is now slipping to marginal lows for the day in the European session, with bids placed around Thursday's base at USD1.3690 coming into play. Light stops noted below, which if triggered would expose this week's 23-year lows at USD1.3620.

Most important events of the day