Forex

Daily Forex Analysis (August 19, 2010)

Contributed by Finexo

By Finexo

Coming Up Today (all times GMT)

   - GBP Retail Sales m/m. (8:30)

   - USD Unemployment Claims (12:30)  

   - USD Philly Fed Manufacturing Index (14:00)   

   - USD Natural Gas Storage (14:30)

Amid continuing concerns that economic recovery is slowing, gold traded close to its seven week high as investors sought the safe haven investment. On the riskier side, equities closed flat and most currencies remained range bound. The US dollar fell against the yen, the Euro failed to breach $1.29, and the Canadian dollar gained.

EURUSD An optimistic outlook surrounded the Euro earlier this week due to an increased demand motivated by the German government’s bond auction and the single currency rallied to a $1.2930 resistance level. However, failing to hold firm above $1.29, Euro gains came to an end yesterday.

GBPUSD Recovering from a three week low the pound hit the day’s high 0.1% higher at $1.556. This followed the release of the minutes from the BoE’s Monetary Policy Committee meeting earlier this month.  The data released by the central bank showed an 8-1 vote keeping the interest rate 0.5%, with only one board member favoring an increase. The dissenting vote represented the view that economic conditions have improved sufficiently in the last year, therefore easing could be relaxed and interest rates could be gradually increased. Investors reported option related offers of $1.5660/90, which might limit the Cable’s gain.