Currency Market Updates | Range trading continues…

Range trading continues…

Range trading continues…

The Euro zone data released this morning (CPI and EU unemployment) has carried the theme of the week and met the consensus expectations. The fact that CPI has remained steady will slightly ease the pressure on the ECB to cut interest rates in their March meeting.  In the forex markets the theme of the week for most currency pairs has been range bound trading. EUR/USD looks the most likely to break its current range as it approaches 1.26, GBP/USD is also approaching support at 1.4150 and GBP/EUR is being buoyed by USD strength against EUR.

Over the last week we have continued to see the YEN unwinding particularly against the USD falling 9% from the low to high point in the week- a major shift in sentiment!  This is not surprising after a poor start to 2009 for the Japanese economy; figures demonstrated that exports fell 46% in January alone and their economy sank 3.3% in the last 3 months of 2008.  This weak data was exasperated by the resignation of the Japanese finance minister Shoichi Nakagawa following his erratic performance at the recent G7 meeting.

The weakening of the Yen as discussed earlier this week underlines a shift in sentiment away from a currency previously conceived as a “safe haven”. The trend of the “Dollar Index” which tracks the US currency against a basket of currencies demonstrated this movement away from Yen and back into the dollar.  The index has already increased 8% in 2009 as investors are now looking at the US dollar as the favourable option for safety. This is ironic given the awful data arising from the US economy…. yesterday we saw durable goods fall 5.2% in January and jobless claims soared to 667,000- very weak data which only helped to strengthen the dollar as risk aversion and a flight to safety stepped up a notch. Later today the GDP data and personal consumption expenditure from the US at 13:30 GMT will provide more feedback for the US economy.
The contents of this report are for information purposes only. Currencies Direct is a forex currency trading company providing the best & the most competitive foreign currency exchange rates for international money wire transfers… it is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Currencies Direct & Forex trading

Currencies Direct & Forex trading

Edward Kirwan, BSc Hons, is an independent professional Investment Portfolio Consultant working with Currencies Direct and is based in Spain. Working with overseas property investments, currency trade, corporate foreign exchange, international payments and transfer payments overseas are all an important elements of this business.

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