The EURUSD traded to the highest level in almost a year on the back of an increase in US industrial production.

  • Improved economic data encouraged investors to sell the US dollar and buy higher yielding assets.  The greenback slid over half a percent to 1.4737 against the euro, the weakest level since September 25, 2008.  The euro managed to gain against the dollar as traders pushed prices above 1.4720, a technical level just above the December 18 high.
  • US industrial production, which measures output at US factories, mines and utilities climbed 0.8% in August, beating economist's estimates as data from the Federal Reserve in Washington showed.  The VIX, a benchmark index for US stock options, slid to its lowest intraday level in a year as investors paid less for protection against declines in equities.
  • The Dollar Index is at its lowest level since September 23, 2008 after falling as much as 0.5% to 76.17 or 15% from its 2009 high of 89.624 reached in March.  Crude oil advanced higher on Wednesday to over $72.50 a barrel after the Energy Information Administration reported a supply decrease of 4.7 million barrels.
  • In Europe, the sterling fell to a four-month low against the euro as a report showed the UK's jobless rate rose to the highest level since 1995.  The EURGBP peaked at 0.8934, the weakest level since May 15 while the GBPUSD was little changed trading in a 50 pip range between 1.6470 and 1.6520 as of 05:50 GMT.

Currency to watch out for: EURUSD & EURGBP

  • The EURUSD pivot point is at 1.4640 with a preference to enter into long positions at 1.4650.
  • The EURGBP pivot point is at 0.8900 with a preference to enter into long positions above 0.8900.

Today's calendar and market movers:

  • UK Retail Sales month on month expected to drop to 0.2%
  • US Building Permits expected to rise to 0.58 million
  • US Unemployment Claims expected to rise to 554,000
  • US Philly Fed Manufacturing Index expected to rise to 8.1

Stocks:

  • US stocks rose on Wednesday for the third day, hitting fresh 2009 highs.  The Indexes closed higher from 1.1% to 1.5%.
  • As of 06:20 GMT the Nikkei is trading at 1.68% and the Hang Seng 1.82%.