The U.S. dollar retreated today where the slight wave of optimism seen in the market supported other currencies to gain strength, reflecting negatively on the dollar to trade lower and extend the losses recorded yesterday.
As we can see, optimism is seen in equities, while demand for safe havens retreated today as jitters and fears eased in the market, especially in Europe after the good fundamentals seen along with the significant improvement seen in regards to a Greek default.
The U.S dollar retreated on Monday after setting six-month record at 77.77, where the index extended the losses since then and is currently trading around 76.57. The greenback recorded a high of 77.04 and a low of 76.48, after opening the session today at 76.80.
Europe remains the main focus in the market, while positive signs appeared today and supported the slight optimism and confidence in the market, and also supported the common currency to trade higher against greenback.
Moreover, the sterling pound rebounded to the upside after fundamentals from the country reflected less than expected drop in retail sales, adding more downside pressures on the U.S dollar to trade lower.
Concerning the GBP/USD, the pair advanced to currently trade around 1.5818, after opening the session at 1.5767. in addition the pair reached a high of 1.5837 and a low of 1.5728.
The current optimism seen is driven by the eased jitters in Europe as the French President Nicolas Sarkozy and the German Chancellor, Angela Merkel confirmed that Greece is to remain in the euro zone, where after the conference call held yesterday between Merkel and Sarkozy along with the Greek Prime Minister, George Papandreou the common currency rebounded to the upside, and extended the gains.
The euro appreciated today against the U.S. dollar, where the EUR/USD pair after opening the session at 1.3755 rebounded to the upside to reach a high of 1.3824. The pair also recorded a low of 1.3701, and is currently trading around the critical level of 1.3810, which represents the ascending minor channel's resistance; technically speaking, this level should specify the direction whether the pair will breach the mentioned resistance at 1.3840-10 to continue the upside move or the pair will return to resume the downside movement.
Moreover, the Swiss National Bank kept the Libor target rate unchanged at 0.0-0.25% in line with expectations in order to control the rapid appreciation seen for the currency, especially after the bank set the minimum exchange rate for the franc against the euro.
In regards to USD/CHF, the pair opened the session today at 0.8759 and recorded the highest at 0.8795 and the lowest at 0.8718, and is currently hovering around 0.8737. Technically, as long as the pair is stable below 0.8920 the bearishness seen could continue.