Dollar gains on optimism over the US recovery
- The US dollar rose against a basket of currencies on Tuesday's currency markets supported by upbeat US economic data. Data revealed Manufacturing activity in the US rose at its fastest pace in seven months underlining a sustained recovery in the world's biggest economy. Investors are expecting today's factory orders data and FOMC minutes hoping this will give a clearer view about the US growth in 2011.
- The euro edged lower against the US dollar today falling as low as 1.3323 dollars from 1.3394. Against the Japanese Yen and the Swiss franc, the euro edged higher helped by rising optimism that the US economy is accelerating. The single currency rose to a two-week high of 109.71 versus the Yen and to 1.2528 versus the franc.
- The dollar climbed against the Japanese Yen breaking above the 82.00 level hitting an intraday high of 82.22 yen. Against the Swiss franc, the greenback edged higher moving higher from a record low hit in earlier days. Dollar rose to 0.9391 francs from a record low at 0.93 francs.
- The Australian dollar plummeted on Tuesday weighed by massive floods in the Northeast part of the country hurting coal exports and wheat production. Australian Shares fell today and the Aussie fell against the dollar from 1.0212 to 1.0066 dollars. Australia's biggest floods in decades can hurt the country's GDP despite surging commodity prices.
- Gold edged lower today weighed by a stronger dollar and a heightened risk appetite in the market. The precious metal fell to 1413.48 from 1423.70 dollars an ounce. A stronger dollar pushed the gold lower as it becomes a more expensive bet for investors outside the US
Currency to watch out for: EURUSD & USDJPY
- § The EURUSD pivot point is at 1.3400 with a preference to enter into Short positions at 1.3390
- § The USDJPY pivot point is at 81.75 with a preference to enter Long positions at 81.80
Today's calendar and market movers:
- § Germany's Unemployment Change is forecasted to fall to -12K
- § US Factory Orders is forecasted to fall 0.1%
US equities closed positive on Monday with the S&P500 up 1.13% and the DJIA up 0.81%. The European bourses are trading positive with the FTSE unchanged and the DAX and the CAC trading up 1.09% and 2.53% respectively. The NIKKEI and the HSI at the time of writing are trading up 1.62% and up 0.51% respectively.
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