Afternoon Forex Overview

Daily Forex Fundamentals | Written by Dukascopy Swiss FX Group | May 07 09 14:40 GMT |

The euro hit a one-month high against the dollar Thursday after the European Central Bank announced plans to buy around EUR60 billion in debt securities outright, which gave a further boost to global risk appetite. The announcement by ECB President Jean-Claude Trichet came in addition to the ECB's rate cut Thursday to 1.0% from 1.25%, and helped push the euro to as high as USD1.3441, its highest since Apr. 6. Analysts say that while all the details remain unclear, it is likely an attempt to liquefy Eastern European banks, letting them swap local currency bonds into euro-denominated bonds. Thursday in New York, the euro was at USD1.3421 from USD1.3335 late Wednesday, while the dollar was at JPY99.21 from JPY98.28. The euro was at JPY133.19 from JPY131.01. The U.K. pound was at USD1.5056 from USD1.5140 late Wednesday, while the dollar was at CHF1.1297 from CHF1.1315. U.S. data early Thursday showing a rise in productivity last quarter and a decline in weekly jobless claims had little impact on markets, except perhaps to boost risk appetite more, putting further pressure on the greenback. Meantime, the Canadian dollar is little changed Thursday morning after retreating from a six-month high in earlier trading. The U.S. dollar is currently trading around CAD1.1680 from CAD1.1675 late Wednesday. It has rebounded from a session low at CAD1.1638. Market expectation EURUSD high print was USD1.3471 with the pair backing off as decent selling emerges ahead of the 200d ma. Profit-takers said to take money off the table after buying sub USD1.3300 earlier. EURJPY - easing back from earlier session highs above JPY133.60, though underlying tone seen as positive while above the 200-day moving average, with bulls eyeing a close above (JPY132.65) for the first time since August 2008. Next area of resistance seen placed at JPY134.30 (previous high April 14 and 76.4% retracement of last month's fall). The Canadian currency is supported by higher prices for crude oil and other commodities and strength in stocks, and is expected to remain on a strengthening track, although it's considered vulnerable to temporary setbacks. 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.