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Trading Currency - A Summary

Currency Markets − Aftenoon Summary

Mon, Aug 10 2009, 16:43 GMT
by Anna Coulling

Master The Markets  |  View company's profile

Currency Markets - European Trading

The euro and U.K. pound fell to session lows against the dollar early Monday, as risk aversion made its way into currency markets following a decline in European stocks. However, the euro is still slightly up against the dollar from late Friday and currencies are within narrow ranges. The European currencies benefitted from a slight rebound overnight, following a sharp sell off last Friday, on gains in Asian stocks. But as investors took profits on equities, the euro and pound dipped. Monday, the euro fell as low as USD1.4163 and the U.K. pound declined to USD1.6583. The euro also sank to session lows against the yen, JPY137.57, and Swiss franc, CHF1.5339. Last Friday, for the first time since the financial crisis gripped investors, the U.S. unit gained on positive U.S. news. The dollar was bought on interest rate expectations and economic fundamentals, something that hadn't happened since the world's major central banks began their aggressive easing campaigns. Usually, as a safe haven asset and low yielding currency, the dollar had been declining throughout the past two years against riskier, higher yielding currencies, such as the euro, when spurts of positive data boosted market sentiment - even if it is was positive U.S. data.

Currency Markets - New York Trading Session

While the U.S. economy is showing signs of healing, investor sentiment is still closely correlated to developments out of China and any possibility that easing measures there will be curtailed. Now, the market is wondering whether the dollar can maintain those gains and if it has really broken its tie to the risk averse trade. The euro dollar continues to stumble lower, marked with fresh lows near USD1.4155 amid light flows but with the dollar maintaining  a slightly positive tone as traders react, in part, to a raft of euro negative scenarios painted by various technical traders. The euro vs dollar continues to find demand interest around the Friday low, extending to USD1.4150, but stops are to be  building below there, down to USD1.4140.

The US dollar vs Japanese yen has rebounded to JPY97.30+ in current trading, revisiting the better levels seen at the start of the US session though falling short of the JPY97.45 rebound highs that capped the pair in European trade. The UK Pound reported demand in the USD1.6560/50 area, which again came under pressure, but this was sufficient to contain the fall as sterling trades with a heavy tone, cable losing around 1% from the Asian highs as euro sterling made a show back above stg0.8550. Technical traders highlight the next key support at USD1.6514 (50% retracement of July-August rally, while the 21-day moving average is noted ahead at USD1.6549).

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.

Published on  Mon, Aug 10 2009, 16:44 GMT

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