If you like me... Bookmark me!...

Home » Forex

EURO GAINS FURTHER ON SPECULATIVE POSITIONING

 
16 July 2010

Dollar weakness has become the main story with yesterday’s batch of US economic data again largely disappointing, doing nothing to alleviate concerns about the pace of economic recovery. A third straight month of falling producer prices and soft manufacturing data came on top of Wednesday night’s FOMC minutes which showed that the Fed’s policy committee stood ready to do more to stimulate the economy if the pace of recovery slows further.

The euro touched a fresh two-month high against the dollar on Friday as weak U.S. data weighed on the U.S. currency while traders and analysts said a rise in European money market rates supported the euro.

Sterling has also rallied strongly against the weak dollar and remains close to the $1.54 level in early trading this morning, despite some mild profit taking. An unwinding of short stg-dollar positions has helped the upward pull on sterling from euro strength against the dollar. It is also worth noting the UK currency has failed to match the euro’s uptrend, with three consecutive days of Sterling weakness against its counterpart and a 5 point drop from the last major high – all Euro buyers should look to work STOP orders to protect against further downside movement.

Euro-priced bank-to-bank lending rates also continued their 3-1/2 month upward drive on Thursday, pushed on by the sharp drop in spare ECB cash in money markets and the ongoing euro zone debt crisis jitters. What is surprising the Forex markets is the strength of the Euro over the last week which is starting to look both fundamentally and technically sound, with price movement this morning looking rather bullish.

If you would like to discuss your requirement buying into any of the 16 most actively traded currencies do not hesitate to give me a call on my direct line +44 1736 335264 or email me [email protected]

Tom Trevorrow
Currency Analyst

Sending money abroad? Converting currency? exchange rates
Forex Trading     Exchange rates     Dollar exchange rate     Pound exchange rate     Euro exchange rate
Subscribe to Forex Rate - Currency News by Email