Forex

Daily Forex Analysis (August 03, 2010)

Contributed by Finexo

By Finexo

EUR/USD

The Euro eased slipped from a 3-month high against the Dollar this morning, as concerns eased over the strength of the U.S. economic recovery.  Yesterday, Federal Reserve Chairman Ben S. Bernanke stated that the economy “is now expanding at a moderate pace.” The Fed Chairman went on to say, at the Southern Legislative Conference, that while the U.S. has “a considerable way to go” for a full recovery, “rising demand from households and businesses should help sustain growth" and that rising wages will most likely propel household spending in the next few quarters. The single European fell to $1.3149 during the late Asian session, a daily low.

Up ahead today, the U.S National Association of Realtors will release the number pending home sales. Last month, the number plunged by 30%, after a government homebuyer tax credit expired. This time around, a correction is expected – which could provide a boost to the weakened Dollar.

AUD/USD

The Australian Dollar fell against all its major currency counterparts after the Australian central bank opted to hold interest rates steady for a third consecutive month. RBA Governor Glenn Stevens held the overnight cash rate at 4.5%, in line with market expectations, after slower inflation and reduced financial risks abroad

left the central bank with little need to further tighten its monetary policy. Following the announcement, the Aussie slipped to $0.9112, down 0.1% from the day's opening price, but up from $0.9095 before the decision. Two government reports, released before the rate announcement, showed that building approvals unexpectedly fell in June and retail sales rose less than predicted.