USD Plunges On Data

Daily Forex Fundamentals | Written by MG Financial Group | Dec 12 08 01:33 GMT |

The dollar plunged in Thursday trading, falling to its lowest level in nearly 2-months against the euro at 1.3405 and yen at 91.15. Prompting the steep sell-off in the greenback was a set of dismal US economic reports - which included weekly jobless claims and the trade balance figure. The weekly jobless claims report unexpectedly surged to its highest level in 26-years at 573k, worst than the 525k forecasted and sharply higher from the previous week at 509k. Meanwhile, the October trade deficit ballooned to $57.19 billion versus calls for an improvement to $53.5 billion from $56.47 billion in September. Safe haven flows jumped into spot gold, pushing it to a two-month high at $833 per barrel. Meanwhile, US equities struggled across the board with the Dow Jones slumping by 2.24%, the Nasdaq sliding 3.68% and the S&P 500 losing 2.85%. The US economic calendar on Friday will be closely scrutinized with traders looking at November retail sales, PPI and the December University of Michigan consumer confidence survey. The headline November retail sales is expected to improve to -1.9% from -2.8% from October, while the excluding autos figure is seen improving to -1.7% from -2.2% a month earlier. The November PPI is expected to decline by 2.0%, compared with a 2.8% decline a month earlier. The University of Michigan consumer confidence index is seen drifting slightly lower in December to 55.0 from 55.3 a month earlier. Euro Rallies to 2-month High The euro jumped to its highest level in two months against the greenback above the 1.34-level. ECB Board member Weber tempered expectations for further aggressive policy easing from the Central Bank, saying 'if the benchmark rate sinks below 2% when medium to long-term inflation expectations are just below 7%, that implies negative interest rates', which he expressed as wanting to avoid. Eurozone economic data due out later in the session include Q3 labor cost and October industrial production. EURUSD has relinquished its earlier gains, drifting to 1.3315 with support seen at 1.33, followed by 1.3270 and 1.3230. Subsequent floors are eyed at 1.32, backed by 1.3160 and 1.3120. On the upside, interim resistance starts at 1.3360, backed by 1.34 and 1.3440. Additional gains will target 1.3470, backed by 1.35 and 1.3540. MG Financial Group http://www.mgforex.com Legal disclaimer and risk disclosure MG Financial Group, or any of its related companies, will not be held responsible for the reliability or accuracy of the information available on this site. The content provided is put forward in good faith and believed to be accurate, however, there are no implicit guarantees of accuracy or timeliness.