Greenback Remains Under Stress

Daily Forex Fundamentals | Written by Crown Forex | Jun 27 08 10:16 GMT |


The greenback is continuing its fall from yesterday although the fundamental data released from the U.S economy should have helped support the dollar slightly, but the negative sentiment in the market now has currently more affect than anything. Credit conditions are still tight while the financial market turmoil continues. Later on this afternoon we are expecting economic data concerning inflation from the U.S.

The EU economy today released its current account showing that the deficit narrowed but still the consumer confidence came in showing a fall of 17 worse than the expected -16 and the prior -15 as inflation continued to rise. The ECB's Chairman Jean-Claude Trichet is signaling for an interest rate hike which could be a seven-year high up to 4.25% in order to battle inflation. The euro is gaining on the back of the weak greenback as the pair is currently trading at 1.5768 while recording a high of 1.5782 and a low of 1.5719.

The UK economy released its GDP annual first quarter final reading showing that the economy contracted to 2.3% while the preliminary reading was 2.5%. We kind of saw of hint of this yesterday as BoE Governor Mervyn King said that growth need to become a little sluggish in order to contain inflation which they believed might pass the 4% way above the banks 2% target. Currently the sterling is trading between the support of 1.9825 and the resistance of 1.9895 at 1.9865 while the pair continues to gain recording a high of 1.9900 and a low of 1.9805.

As for the yen it is gaining as consumers fear the market as they buy low yielding currencies and sell high yielding currencies in which we call unwinding of carry trades. The USD/JPY is currently trading at 106.24 while recording a high of 107.20 and a low of 106.15.

Crown Forex

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