Calm trading ahead of ECB’s rate decision

By @ibtimes on

The drop in dollar has been put to hold, as traders await the ECB's rate decision, which will be released at 12:45 GMT, where analysts predict that the bank will keep rates unchanged at 1.0 percent for another month.

The US dollar index continued to show a drop in the value of the dollar despite cautious trading among investors where the index that tracks the performance of the dollar against six-other majors, fell on the daily scale to 76.640; this is compared with the opening levels of 76.700. The index reached the highest at 76.811 and the lowest at 76.635.

The euro sustained trading near the strongest level in almost four-months as it held trading at the opening levels of 1.3863 while set a high of 1.3881 and a low of 1.3831.

Analysts predict that Trichet language in regards of inflation would be toughened during this meeting, which would pressure the pair to witness volatile movement when the press conference is held at 13:30 GMT.

Note that the Euro-Zone economy sustained did not witness a revision on fourth-quarter growth where the economy expanded by 0.3% in the three-months ending December 31, 2010, while on the yearly scale, the economy expanded by 2.0 percent.

As for the British pound, the royal currency fell against the dollar in trading, where it managed to breach and sustain trading below the support at 1.6295, to currently trade at 1.6267. The pair opened trading at 1.6321 while set a high of 1.6332 and a low of 1.6259.

Trading range for today is set among the support at 1.6153 and the resistance at 1.6295.

The dollar fell against the Japanese yen, to trade at 81.74, compared with the opening levels of 81.85 where it managed to reach the highest at 81.92 and the lowest at 81.70.

Japan's economic conditions rebounded during the first-three months of 2011, where capital spending supported the improvement as it rose by 3.8 percent in the fourth-quarter of last year, nonetheless, the economy recorded its first contraction in five-quarters, where conditions fell by 1.1 percent, due to government's stimulus package effects failing to support the economy.

The pair's movement is bounded by the support at 81.50 and the resistance at 82.00.

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