Pessimism fell to some extent in financial markets, but we can't say that optimism spread, but what we see is some reduction in the severity of pessimism in the financial markets and traders tended cautiously towards high-yielding assets.
Chinese GDP expanded 9.5% down from 9.7%, although it noted a slight decline in growth, but it is still better than forecasts, as it gives the impression that China's performance didn't fall much despite the monetary tightening steps.
Although the Federal Reserve is still taking a neutral position in terms of monetary policies, and committed to its stance on low interest rates, but some traders felt that the tendency of some members of the Feds for a third round of quantitative easing if the economy continued to show weakness, which caused this wave of bearishness for the dollar against a basket of foreign currencies today.
The European debt crisis is still worrying, and the confidence in the markets is still fragile, but the reduced pessimism in the markets today offset the impact of Mood's decision to cut Ireland's credit rating to junk status, and the euro was able to benefit from the weak dollar and the optimism which started during the Asian session today.
The euro recorded the highest today at 1.4110 from the low of 1.3949, benefiting form the technical support level 1.3915 that stabilized above it yesterday, turning upwards between the resistance at 1.4090 and 1.4150 and the pair's trading is stabilizing between the nearest support level 1.4010 and the mentioned resistance levels, and stabilizing above this support level may support the upside move, but the prevailing fears may limit the upward trend for the euro.
The pound rose against the dollar for the second day in a row and the economic fundamentals from the United Kingdom didn't exactly support sterling, as the unemployment rate remained unchanged at 7.7% with the increase in the jobless claims during June, but the weakening dollar has the main role in supporting the upward wave for the sterling, as it rose from 1.5903 to reach 1.5988 and the current trading is in the middle levels with some tendency towards the sterling, its very important that the pair stabilizes above 1.6045 so that the pound can prove its ability to continue in its upward trend, and if not the negative tendency on the pair will be seen, and if the trading stabilizes below the support levels 1.5945 and 1.5880 we might see the pound falling further against the dollar.
The Japanese yen is witnessing a sharp volatility, as the weakening dollar made the Japanese yen increase its gains , as the dollar dropped from its highest today at 79.57 to the lowest at 79.34 abut the dollar returned to witness some strength against the yen, as the reduced pessimism in the markets caused the yen to drop against the dollar; if the pair traded below 79.65 the dollar may remain affected by the negative pressures as the pair continues south.