Strong Greenback
Strong Greenback
The greenback is gaining momentum as there are speculations there will no further rate cuts as it is highly believed in the markets that the worst has come on the US economy and that it will soon start to recover. The world’s largest financial companies which include Citigroup Inc. and UBS AG and Merrill Lynch & co., are raising approximately $247 billion to make up for the $329 billion of write downs and credit losses.
The EU economy is slowing down as they are currently suffering from an inflation rate of 3.3% which is way above the banks target of 2%. With rising food and energy prices adding to inflationary pressures. Today the euro is depreciating due to technical movements as they lack economic data for the day. The EUR/USD is currently trading at 1.5478 while recording a high of 1.5566 and a low of 1.5464.
The royal currency got some support from the inflation data that came out today showing that inflation rate inclined by the most since 2002 which means that the BoE does not have room to further cut interest rates in order to help revive the UK economy. Although the support caused the sterling to recover some of its losses, but still was not enough for the pound to appreciate versus the greenback affected by falling house prices esepcially in London homes. The UK economy continues to fall as result to the deepening of the housing sector while prices continue to slip. The GBP/USD is being traded at 1.9483 while recording an intraday high of 1.9587 and a low of 1.9465 so far.
We are currently witnessing in the market unwinding of carry trades as investors sell high yielding currencies and buy low yielding currencies as the yen benefits from this. The USD/JPY pair is currently trading at 103.48 while recording a high of 104.00 which the pair lacked momentum to breach, and recorded a low of 103.39.
Crown Forex
disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.
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