The dollar keeps rallying against major currencies except for the yen as global equities have been falling today. The big news in Forex land today was downgrades and warnings from bond ratings companies on Greece's sovereign debt. Also today, the Bank of Canada left rates unchanged at 0.25%, and disappointed CAD bulls who were counting on a more hawkish statement from the central bank.
More on the important news, but first a recap of the numbers:
EURUSD : 1.4682 (- 142 pips)
GBPUSD : 1.6261 (- 183 pips)
AUDUSD : 0.9025 (- 101 pips)
USDCAD : 1.0665 (+ 158pips)
GOLD : 1128 ( - $29.00)
CRUDE OIL : 72.75 (- $1.25)
S&P 500 :1090 (- 13.5 points)
Greece Sinks the Euro
The Greek debt news caused sentiment to shift against the Euro, as Forex traders are becoming to realize that Eurozone countries must tackle their rising debt levels if they want to exit the financial crisis in healthy economic condition. This news comes nearly a week after the ECB held back from setting any semblance of a timetable for raising rates. Forex traders may continue to look negatively on the Euro until a clearer picture of the Eurozone's future exists.
An interesting pair to look at is the EURCHF. Switzerland has lower interest rates than the ECB, and its banks were hit hard by losses from the financial crisis. Nonetheless, the EURCHF has been trending lower and may finally trade below 1.5000. Currently, intervention form the SNB is the key item that is holding the pair higher. However, if the Eurozone's economic growth continues to stall, we may see the SNB throw in the towel and leave rates alone.
BoC Leaves Rates Unchanged
The USDCAD is trading higher today as the BoC failed to impress Forex traders with their conservative language. Also hurting the CAD are gold prices that have been heading back towards yesterday's lows. Regarding the BoC meeting, the BoC stated that the recovery remains on track, however they won't raise rates until at least June 2010 as inflation levels remain low. FCAD bulls were hoping that the growth of the commodity based Canadian economy would lead the BoC to speed their interest rate rising plans. On the news, the USDCAD is trading at 1.0665, it highest point for the month.