Optimism spread through global financial markets on Wednesday, where traders were optimistic after Italy announced new austerity measures, which eased concerns from the European debt crisis, while news emerged that Obama is set to announce a new stimulus plan to support the labor market, where reports suggested the stimulus could reach $300 billion.
Meanwhile, the Bank of Canada left the benchmark interest rates unchanged at 1.00 percent in line with expectations, as the BOC signaled prices pressures remain well under control, while also confirming that the strength of the Canadian dollar continues to put downside pressures on economic growth.
The U.S. dollar index, which measures the performance of the USD against a basket of major currencies including the Euro, the Pound, and the Yen, fell on a daily basis to trade at 75.59, compared with the yesterday's closing level at 75.91, while recording a high of 75.79 and a low of 75.23, noting it opened with a downside gap. Gold prices extended their drop from a record high set yesterday above $1900 an ounce, to trade at $1813.93, compared with the opening level at $1875.42 an ounce, and crude oil prices rose to trade at $89.17, compared with the opening level at $86.40 a barrel.
The Euro rose against the Dollar, where the EUR-USD pair is trading at $1.4054, compared with the opening level at $1.4009, while recording a high of $1.4149 and a low of $1.4006. The pair is now trading above the $1.4025 level, and so long it remains above this level, we should expect more upside movement and the target then will be the $1.4150 resistance level, however, if the pair drops below $1.4025, the next target will be the $1.3910 support level.
The British Pound was slightly lower against the U.S. Dollar, where the GBP-USD pair is now trading at $1.5938, compared with the opening level at $1.5951, while the pair recorded a high of $1.6039 and a low of $1.5937. The pair is now trading below the important level at $1.5950 and so long it continues to trade below this level, the next target is set at $1.5780, however breaching the $1.5950 level to the upnside would send the pair to the $1.6100 resistance level.
The U.S. Dollar fell against the Japanese Yen in thin trading, where the USD-JPY pair is now trading at ¥77.35, compared with the opening level at ¥77.53, while recording a high of ¥77.55 and a low of ¥77.07. The pair is now trading between the support at ¥77.20, and so long it continues to trade above this level, the target is set at the resistance at ¥79.55, on the other hand, breaching the 77.20 support would send the pair to the downside and target ¥75.80.