The dollar is gaining on the back of weak major currencies and not due to its strength. The U.S. economy is scheduled to release its ISM manufacturing today in which expectations show will fall to its weakest levels since 1980 arousing fears in the markets that the world is facing a deepened recession. The Feds already have interest rates set at their lowest rate in history as they left them between the range of 0.25-0.00 percent last week.
The European Central Bank is anticipated to reduce interest rates as producer prices are scheduled for tomorrow in which expectations show will plunge further giving the bank extra room to slash interest rates. As a result of this the euro is reducing lost ground in the market to mark the lowest level in nearly two months. The EUR/USD is currently trading at 1.2718 while recording a high of 1.2775 and a low of 1.2706 as the pair trades in narrow ranges.
The pound like the euro lost ground in the markets on fears that the UK banking crisis is widening arising worries that the economy is facing a prolonged recession as they are currently in a recession. Also speculations in the market are rising that the BoE will reduce interest rates to stimulate economic growth. The GBP/USD is currently trading at 1.4329 while recording a high of 1.4438 and a low of 1.4318 while the momentum indicators are showing us downside movement. For the pair on the daily charts we see that the pair is trading in an overbought area as the Stochastic Indicator is showing us.
The yen is currently rising versus the dollar as investors are worried about the outlook of major economies, yet the rise in the yen might not last long due to anticipations of Japanese exporters might push the government to intervene to lower the yen to increase exporters. The USD/JPY is currently trading at 89.63 while recording a high of 89.93 and a low of 89.49.