Bank Of England Cuts To 1.0%

Daily Forex Fundamentals | Written by Easy Forex | Feb 06 09 01:25 GMT |

U.S. Dollar Trading (USD) despite weak economic data released overnight, stocks in the US rallied off year lows to end up over 1%. High Yielders rallied and the USD/JPY surged past resistance at 90 Yen. Weekly Jobless Claims jumped to 626K vs. 585K previously and December Factory Orders dropped -3.9% vs. -3%. Q4 Labor Costs rose 1.8% vs. 3% forecast and Productivity jumped to 3.2% vs. 1.4% expected. Crude Oil closed up $0.85 ending the New York session at $41.17 per barrel. In US share markets, the Dow Jones gained 106 points or 1.34% and the NASDAQ gained 31 points or 2.06%. Looking ahead, December Non Farm Payrolls are forecast at -525K vs. -524K bringing the Unemployment Rate to 7.5%. The Euro (EUR) came under pressure from plummeting German Industrial Orders and dovish comments from ECB President Trichet after he held rates at 2.0%. Trichet Indicated further rate cuts were on the table and noted that Eurozone exports were weakening. December Industrial fell -6.9% vs. -2.5% forecast. Overall the EUR/USD traded with a low of 1.2763 and a high of 1.2904 before closing the day at 1.2790. Looking ahead, December German Industrial Output is forecast at -2.5% vs. -3.1% previously. The Japanese Yen (JPY) was sold aggressively at the start of the US open as Stocks rebounded and news that the US stimulus package was nearing completion. Strong resistance at 90 broke and the USD/JPY climbed quickly to 92. Overall the USDJPY traded with a low of 89.23 and a high of 92.24 before closing the day around 91.15 in the New York session. Looking ahead, December Leading Indicators released previously at -3.7 The Sterling (GBP) rallied after the Bank of England cut rates to 1.0% and Halifax House Price Index rose for the first time in 12 months 1.9% m/m. Resistance was met at 1.47 but the crosses continued to make gains with GBP/JPY up over 5 big figures and the EUR/GBP falling sharply to month lows of 0.8750. Overall the GDP/USD traded with a low of 1.4368 and a high of 1.4703 before closing the day at 1.4630 in the New York session. Looking ahead, Industrial Output forecast to drop -1.2% vs. -2.3% previously and January PPI Input Costs are forecast to rise 0.5% vs. -2% previously as the weakening Pound increases import costs. The Australian Dollar (AUD) broke higher as heavy AUD/JPY buying emerged in the US session on renewed risk appetite. Commodities also rallied and this helped to underpin the move higher. Overall the AUD/USD traded with a low of 0.6406 and a high of 0.6580 before closing the US session at 0.6540. Looking ahead, RBA Monetary Policy Statement. Gold (XAU) traded higher on the back of speculation Gold will continue to rise as the financial crisis continues. Overall trading with a low of USD$902 and high of USD$924 before ending the New York session at USD$915 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