The market seems to be dominated by carry trades as investors seek higher yielding currencies by borrowing lower yielding currencies. Still the dollar is running weak against major currencies except against the Japanese Yen that is weakening due to the affect of carry trades.
As for the European currency advances, it has been offset by comments from officials in Europe who expressed concern about rates leading people to wonder whether the ECB will cut in rates or not given the current circumstances. The euro inclined today recovering overnight losses caused by profit taking. The pair is now trading towards the upside recording a high of 1.5275 and a low of 1.5145
Meanwhile, the UK pound declined sharply at the start of today's session against the dollar after disappointing UK consumer confidence survey. Yet, improvement in the UK PMI reading helps offset the earlier plunge. With the services sector also improving in the UK, this is likely to be reflected in tomorrows BOE rate decision. As for the pair today, it inclined along with the incline in the British pound to the upside to record a high of 1.9900 and a low of 1.9722.
Against the Yen, the dollar is inclining at this hour as a result of carry trades where investors are selling the low yielding Yen and buying higher yielding currencies in hopes for higher return. Thus the pair was dragged by the stronger greenback to fetch at this hour a high of 104.17 and a low of 103.30
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