Dollar strengthens helped by a healing US economy
- The US dollar rose against a basket of currencies today as economic data continue to spur investors' optimism for a US economy that is improving in a fast pace. FOMC meeting minutes were released on Tuesday saying that the US recovery is becoming self-sustaining but its pace is hurt by the stubborn unemployment and at this stage no adjustments will be made in the Fed's asset purchase program. With liquidity back to normal today, world equities falling and commodity prices correcting recent gains the market eyes this week's jobs data hoping this will give a clearer insight.
- The euro dipped against the dollar and fell as low as 1.3257 from yesterday's high of 1.3432. The single currency also fell versus the Japanese Yen and the sterling falling as low as 108.70 and 0.8522 respectively.
- Against the Swiss franc, the dollar continues its upward direction moving further away its recent record low level at 0.93 and today rising to 0.9518. The dollar edged lower against the Japanese Yen, after recovering losses since the start of the new year and the pair fell to 81.88 from 82.27 yen today.
- Commodity prices edged lower on Wednesday stepping off recent record high levels weighing on the Australian dollar. The Aussie extends its losses today against the dollar made in the beginning of the week due to massive floods in the Northeast part of the country that hurt coal exports and wheat production. Australia's currency plummeted against today's stronger dollar falling below parity at 0.9998 from 1.0256 dollars.
- Gold fell today to 1378.75 dollars an ounce as hopes for a US recovery rose and demand for safe-haven assets lowered. The precious metal is under pressure also due to the stronger dollar as it becomes a more expensive bet for non-US currency holders.
Currency to watch out for: EURUSD & USDJPY
- § The EURUSD pivot point is at 1.3330 with a preference to enter into Short positions at 1.3320
- § The USDJPY pivot point is at 82.30 with a preference to enter Short positions at 82.25
Today's calendar and market movers:
- § Europe's Producer Price Index in December is forecasted to gain 0.3%
- § US Employment change in December is forecasted to rise to 100K
- § US ISM Non-Manufacturing in December is forecasted to rise to 55.6
US equities were mixed on Tuesday with the S&P500 down -0.13% and the DJIA up 0.18%. The European bourses are mixed as well with the FTSE trading up 1.93% and the DAX and the CAC trading down -0.21% and 0.39% respectively. The NIKKEI and the HSI at the time of writing are trading down 0.17% and up 0.08% respectively.
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