Eurozone Inflation Drops To 26 Year Low

Daily Forex Fundamentals | Written by Easy Forex | Jan 07 09 01:49 GMT |

U.S. Dollar Trading (USD) was mixed again today gaining against the EUR and JPY but losing ground to most others. US economic data was weak with Durable Goods Orders falling -1.5% in November and Pending Home sales dropping -4%. A bright note was the rebound in December Non Manufacturing ISM to 40.6 vs. 37 forecast. Also released last night were the FOMC minutes from the December meeting where the drastic cut to 0-0.25% Band interest rate decision was taken. The members noted that they were extremely worried about the possibility of a hard recession and wanted to act as quickly to stop deflationary forces building. In U.S. share markets, the NASDAQ was up 25 points (1.50%) and the Dow Jones was up 62 points (0.69%). Crude Oil closed down $-0.23 ending the New York session at $48.58 per barrel. Looking ahead, December ADP Employment is forecast at -473K vs. -250K. The Euro (EUR) continued to slide in Europe as preliminary December Inflation showed a drop to 1.6%y/y well below the 2-3% band opening up the potential of more rate cuts. The pair bounced off support at 1.3300 rallying as FOMC minutes painted a bleak US picture. Overall the EUR/USD traded with a low of 1.3314 and a high of 1.3637 before closing the day at 1.3525. Looking ahead, December German Unemployment is forecast at 3.07Mn with an unemployment rate at unchanged at 7.5%. Also released Eurozone PPI output for November seen falling -1% to a 4.3% y/y rate. The Japanese Yen (JPY) was sold aggressively against most currencies as the uptrend continued to be tested on the USD/JPY. The 94.00 level proved to have little resistance although as Stock came off highs in the US the pair slipped back below this rate. GBY/JPY enjoyed a very strong rally. Overall the USDJPY traded with a low of 92.86 and a high of 94.63 before closing the day around 93.50 in the New York session. The Sterling (GBP) mixed data and a buoyant market mood allowed the pair to rally back towards 1.5000 on cable. Heavy GBP/JPY buying and EUR/GBP once again supported the pair. December PMI Services increased to 40.2 vs. 39 previously. Also released Nationwide House Prices which dropped -2.5% in December. Overall the GDP/USD traded with a low of 1.4506 and a high of 1.4992 before closing the day at 1.4950 in the New York session. The Australian Dollar (AUD) was volatile but better supported ending at new 3 month highs above 0.7200. AUD/JPY made substantial gains as well with stocks making gains across the world. High Commodities continued to support. Overall the AUD/USD traded with a low of 0.7034 and a high of 0.7270 before closing the US session at 0.7230. Looking ahead, November Retail sales are forecast at -0.3% vs. 0.7% previously. Gold (XAU) made small gains after rallying off lows in the US session. Oil rose above $50 a barrel and this helped the precious metal higher. Overall trading with a low of USD$839 and high of USD$870 before ending the New York session at USD$860 an ounce. Easy Forex http://www.easy-forex.com Easy-Forex makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites and the information contained does not take into account your personal objectives, financial situation and needs. Therefore you should consider whether these products are appropriate in view of your objectives, financial situation and needs as well as considering the risks associated in dealing with those products