The greenback gets hammered down to new low for the year against the euro as investors flock towards higher-yielding assets on low borrowing costs.

  • The Dollar Index, which tracks the greenback against the currencies of six major US trading partners, fell to as low as 76.612, the weakest level since September 2008.
  • The British pound advanced to a one-month high against the dollar.  The Bank of England kept its asset purchase program unchanged, buying as much as 175 billion of assets to aid the economy out of recession.  The markets took this as a sign that policy makers may think the economy is now recovering.
  • Bank of Canada kept its main interest rate at a record low of 0.25%.  The Canadian dollar gained against the greenback and according to analysts the USDCAD could reach parity by the end of the year on rising demand for Canadian resources from Asia.
  • Against the yen, the greenback extended its losses to the lowest level since February, trading towards the 91-handle on speculation Japanese exporters are repatriating earnings toward the end of the third quarter.  Japan's economy grew less than initially estimated in the second quarter as companies cut spending and stockpiles fell.  The nation's GDP expanded at an annual 2.3% pace from April to June, much slower than the 3.7% reported last month.
  • There was some hope in Asia as China's industrial production increased at a faster pace than forecast in August as well a surprise climb in new lending.  These reports point to a likely faster growth in the world's third-biggest economy.

Currency to watch out for: EURUSD & GBPUSD

  • The EURUSD pivot point is at 1.4550 with a preference to enter into long positions at 1.4560
  • The GBPUSD pivot point is at 1.6635 with a preference to enter into long positions at 1.6645

Today's calendar and market movers:

  • UK PPI Input month on month expected to rise to 0.9%
  • US Prelim University of Michigan Consumer Sentiment expected to rise 67.5
  • US Federal Budget Balance expected to rise -155.5 billion dollars

Stocks:

  • US stocks continued to advance closing higher for a fifth straight day on Thursday marking their longest string of gains since November.  The three major indexes closed higher 0.8 to 1.2%.
  • As of 06:15 GMT the Nikkei is trading at -0.66% and the Hang Seng at 0.80%