Afternoon Forex Overview

Daily Forex Fundamentals | Written by Dukascopy Swiss FX Group | Apr 20 09 13:59 GMT |

Previous session overview The U.S. dollar gained versus the euro Monday, extending the euro's previous-week losses, as the head of the European Central Bank signaled that policy makers are weighing a further rate cut and will announce new measures at its May meeting. The U.K. pound is sharply lower, pressured by risks associated with this Wednesday's budget statement. The euro is also on the retreat after European Central Bank President Jean-Claude Trichet's suggestion the bank will cut rates by 25 basis points as well as apply nonstandard monetary easing at its next policy meeting in May. The Canadian dollar is also suffering from concerns ahead of the Bank of Canada's interest rate announcement Tuesday and monetary policy report on Thursday, when the bank is expected to outline its framework for possible quantitative easing measures. The Japanese yen, typically a recipient of safe-haven flows during times of risk aversion, is outperforming the dollar. Stocks, a key indicator of risk sensitivity in global markets, are on the retreat, with European indexes lower and U.S. stock futures also in negative territory. In morning trading on Monday, the dollar was at JPY98.39 from JPY99.30 late Friday in New York. The euro fell to USD1.2971 from USD1.3025 and to JPY127.59 from JPY129.32. The dollar rose to CHF1.1693 from CHF1.1670 while the pound fell to USD1.4561 from USD1.4787. Market expectation EURUSD edges higher amid modest flows for trade to USD1.2980/85 area now as risk appetites improve slightly from the earlier dip as a dubious blog link was passed around. Traders reminding of sizeable USD1.3000 expiry for today's NY cut as likely to influence the pair over the next hour or so and offers are mentioned above there, in the USD1.3020 area. Earlier low area based at USD1.2945, key tech support, stops mentioned sub USD1.2940 should losses extend. USDJPY ebbed to lows around JPY98.23 for fresh lows as risk-aversion drove yen crosses lower with equities as some reacted to a blog report of dubious origin. Slide in the pair erased earlier noted bids and stops clustered around JPY98.50/55 area but leaves demand interest at JPY98.15 intact. Stops affirmed below JPY98.00. Pound lifts back above USD1.4580, as reports of BIS demand in dollar-yen (JPY98.40/30 area) takes yen crosses higher. Resistance seen placed between USD1.4590/00. A break above can open a move back toward broken support at USD1.4635. Support remains in place between USD1.4540/30. Dukascopy Swiss FX Group Legal disclaimer and risk disclosure This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.