Good morning from beautiful Hamburg. Yesterday the rate decision was not very surprised. Both central Banks, ECB and BoE, hold the rates steady. Caused by this the USD performed well on Thursday. It is Friday and Varengold wish a nice weekend to all FX traders.
Market review
The both big Central Banks ECB and BoE held interest rates steady at 4.25 % and 5 %. But comments from ECB President Trichet about European economy that he expects a decreasing growth pushed the USD and the EUR/USD fell to a 5 month low. The same development was shown in the GBP which breaks a hard support against the USD. Synchronous the US Dollar index rose to a 5 ½ month high at 74.604 on Thursday after a surprising rose in the US pending home sales.
The Conference Board of Canada´s Index of Business Confidence fell 4.8 points to 91.5 in Q2. That was the fourth followed decline which brought the index to a level which was not seen since 2003. The CAD fell for the eleventh time in the past 13 sessions on Thursday as the momentum carried it toward the next big technical level of 1.05 versus USD.
The high yielded AUD makes no exception in the actual market. It lost every day since 2 weeks about 850 pips to a 4 month low at 0.8960 against the USD. In the NZD it is the same situation. It marks a 10 ½ month low versus USD at 0.7012.
EUR/AUD
The EUR/AUD performed in the last month from 1.62 to 1.70. Now we have the first candles in the daily chart with a decrease. Since the beginning of 2006 it is the sixth time that the market recovered at this level.
NZD/JPY
The NZD/JPY broke last month the 80 level and decreased down to 78. Close to this level the rate turns very often since mid 2007. The losses in this currency pair results more from the NZD than from JPY because the JPY was steady the last two days while the NZD lost against the USD.
