Daily Forex Overview

Previous session overview

On Wednesday, the dollar retreated sharply against both the euro and the yen. The euro was supported by some strength in equities, while the yen was bolstered by technical factors, analysts said.

The Euro broke USD1.28 and closed above the key level in a very bullish day for the single currency. Euro strength was in spite of some very weak data with German January Industrial Orders falling -8% vs. -2.2% forecast.

The British pound strengthened against the dollar overnight but most of the gains disappeared in early morning trade. Meanwhile the pound remained near multi-week lows against the euro due to concerns over the UK economy and banking system.

The Japanese Yen responded to USD weakness with USDJPY pulling back to JPY97.20 but most of the crosses remained relatively unchanged. The market is decidedly less bullish after the failure at JPY100 last week and stock market movements should again begin to direct movement.

The Canadian dollar weakened slightly against the US dollar as oil prices dropped. Oil fell below USD44 a barrel as evidence for global crude demand declined.

The Australian dollar was higher against its U.S. counterpart late Thursday as traders continued to take cues from positive Wall Street leads; however the currency still remains stuck within recent ranges in the absence of any clear signals to sell.

Market expectation

The yen is rallying Thursday against the dollar and euro, while the euro-dollar pair is little changed.

Traders flash up that Russian names seen providing supply, as rate eases around USD1.2760. Note earlier talk of reported magnetic stops sub USD1.2740.

Sterling easing lower, with euro-sterling correcting off its early Europe lows of stg0.9212 back above stg0.9220, with cable easing toward overnight lows at USD1.3823. Bids seen placed between USD1.3825/20, a break to allow for a deeper move toward USD1.3800.

Looking ahead, players will pay attention to U.S. economic reports due later in the day, such as weekly jobless claims. If the data turn out to be worse than expected, short-term-focused players may use it as an excuse to sell the greenback to take profits, Hayashi noted.

Weekly jobless claims may increase by 645,000, compared with a 639,000 jump a week ago.

The euro fell against the dollar and the yen. Dealers said the euro is likely to fall further due to position adjustments, especially against the yen.

Most important events of the day