The USD gained against the EUR on the heels of the ECB press conference anchored by President Trichet. While signaling a possible rate hike in July, the ECB President also added that inflation appears ready to moderate. This left investors with the perception that even if the ECB hikes its interest rate in July it is more likely to be a one off event and not repeated anytime soon. Trichet will finish his term as the ECB President in October. Trichet also faced tough questions about Greece and was unable to offer a clear picture as to how the debt crisis will be resolved. Germany will publish inflation data today and this may prove interesting for traders, the Final CPI number from Germany is expected to be unchanged with a result of 0.00%. The WPI from Germany is expected to gain 0.5%. The EUR has done remarkably well the past two weeks taking into consideration the amount of distressing news that continues to come from Greece and other European nations which face debt woes. Thursday’s trading may point to the possibility that investors had already digested the idea that a rate hike may come from the ECB in July, but they did not get a green light for further hikes after that.
The USD though still trading in the weaker realms of its near term trend against the EUR did find some backing. The Fed has sent no signals that it is going to unleash another round of quantitative easing. Investors fear further erosion in economic data from the U.S. and the pressure that may unfold with certain politicians asking to put another round of stimulus on the table. Weekly Unemployment Claims proved disappointing yesterday coming in with a result of 427k compared to the estimate of 424k. Trade balance numbers did come in better for the States and some analysts said this is what set off a positive run on Wall Street. However, the major indexes have been hit hard the past month and a half and the gains on the major indexes yesterday may have been merely some bottom feeding taking place by speculative investors. Wall Street goes into today’s session with the possibility of finishing lower its sixth consecutive week. There will be no major economic data from the U.S. today and traders will have to rely on existing sentiment as they make their decisions before going into the weekend.
The Forex and Commodities markets proved volatile on Thursday with the Central Bank pronouncements from the ECB and BoE. The price of Gold is trading around 1541.00 USD as of this writing. Crude Oil has also continued to mount some gains in the wake of a lack of unity from OPEC regarding production targets. Commodity prices were likely speculative yesterday based on prevailing ranges being tested. Outlooks for the global economies are mixed at best currently and this means that physical resources and their high values will be put to the test in the coming weeks.
The AUD did particularly well yesterday as it regained some of its lost ground from earlier this week, however the Australian currency continues to see a swift market and it is certain to face continued pressure if economic data slumps further. The JPY remained locked in its consolidated range on Thursday and this came in the wake of further negative reports from Japan regarding its prospects.
The GBP did face downward pressure yesterday. The BoE surprised no one when it remained standing in place regarding its monetary policy. The U.K. continues to face difficult questions like its counterparts regarding growth and austerity. Today the U.K. will publish Manufacturing Production and inflation data. The manufacturing sector has shown a lack of vigor and today’s number is expected to be unchanged. The Sterling remains in a rather range bound sphere against the USD. The real opportunity for traders may come from testing the GBP against the EUR.
Written by bforex.com
