Trichet's press conference hammers the Euro 

By @ibtimes on

The U.S. dollar continued its rise since the morning on concerns that dominate financial markets over the future of the global economic recovery, especially in the United States, which is expressing further slowing signs, especially after the data by world biggest economy which support jitters in the markets. The USDIX index is currently trading around 74.33 recorded a high of 74.44 and a low of 74.01.

The pair continued its bearishness that started yesterday despite hints by the Governor of the Central Bank to raise the benchmark interest rate over the next month, but this signal was expected in the market, Trichet's hints were expected from investors and its positive impact had been reflected on the euro during the past two weeks, as it rose against the U.S. dollar, to record the highest for four weeks.

Trichet's hints to raise interest rates in the next month, left investors worried about the pace of the recovery in the euro area with the downside pressures of the ECB's tightening monetary policy, especially with the sovereign debt crisis that dominate in the region and forecasts for a slowdown in the pace of growth during the second quarter; inflation rates are still rising above acceptable levels for the European Central Bank and that is further agony on disposable income and spending.

The pound rebounded against the U.S. dollar over the past four hours, supported by the economic data that confirmed a decline in price pressures at factory gates in the last month; however, the general prices in the Kingdom are still above acceptable levels by the Bank of England and the government. Also, an economic data showed a sharp decline in industrial production in the kingdom; dear reader, the slowdown in the pace of growth across sectors will make the central bank keep interest rates unchanged in the next period and surely will play its role in keeping the pound range-bound in the coming period with even downside tendencies.

The pair is currently trading around 1.6303 after it dropped to record a low of 1.6213 and a high of 1.6385 compared to the opening of 1.6360. Technically, the pair is expected to decline and achieve targets at 1.6160, but it should stabilize below 1.6380.

The U.S. dollar declined against the Japanese yen, due to investors who preferred to buy low yielding assets, and with low risk appetite and low confidence in the financial markets due to dominating concerns. The pair is currently trading around 80.07 and recorded a high of 80.45 and a low of 79.95; technically, it is expected to continued the bearishness provided stability remains below 80.75 to achieve targets at 77.70.

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