The U.S. dollar dropped today against major currencies as pessimism dominate markets over the outlook of global growth, while oil prices dropped today after Goldman Sachs expected a correction to take place for commodities including oil, which pressured oil prices to drop.
Meanwhile, data from the United States showed that the trade deficit narrowed in February but worse than expected, while import prices increased in March above expectations amid the recent rise in energy prices. Also, Canada's trade balance came out flat in February, worse than estimates as the rising Canadian dollar hurt exports.
The Bank of Canada left the benchmark interest rates unchanged at 1.00 percent, where the BOC signaled it could raise interest rates later this year, nevertheless, the BOC warned that the rising value of the Canadian dollar could weigh down on economic growth.
Moreover, the Japanese government increased the severity of the nuclear crisis to 7 from 5, matching the Chernobyl crisis, which also spread fear among investors over the outlook of the world's third largest economy.
The Dollar index, which tracks the performance of the U.S. Dollar against a basket of currencies including the Euro, the British Pound, and the Japanese Yen, declined on daily basis to trade at 74.94, compared with the opening level at 75.17, while recording the highest at 75.20 and the lowest at 74.92.
Gold prices extended their drop for a second day after rising yesterday to a new all-time record high, where gold was trading at $1453.81 an ounce, compared with the opening level at $1462.66. Crude oil prices also declined from the highest level since September 2008 recorded yesterday to trade at $106.08, compared with the opening level at $109.12.
The Euro rose back today against the U.S. dollar, where the EUR-USD pair rose to trade at $1.4484, compared with the opening level at $1.4423, while recording a high of $1.4519 and a low of $1.4377. The pair is trading above the critical support level at $1.4480 and so long the pair remains above this level, the target is set at the $1.4625 resistance level, but breaching the support at $1.44800 would send the pair to the support at $1.4375.
The Pound however declined against the U.S. dollar, where the GBP-USD pair traded at $1.6274, compared with the opening level at $1.6338, while recording a high of $1.6343 and a low of $1.6227. The pair is trading above the support level at $1.6250 and so long the pair remains above this level, the target is set at the $1.6400 resistance level, but breaching the support at $1.6250 would send the pair to the support at $1.6175.
The U.S. dollar extended its drop today against the Japanese Yen, where the USD-JPY pair traded at ¥83.73, compared with the opening level at ¥84.45, while recording a high of ¥84.57, and a low at ¥82.46. The pair is now trading between the support level at ¥83.50 and the resistance level at ¥85.65, and accordingly, we remain neutral until one of those levels is breached, noting that breaching the support would send the pair to the next support level at ¥82.70.