Forex Snapshots – US Session: Eroded Risk Appetite and Weak Equity Markets Boost the Dollar; G8 Makes No Comment on the Dollar Reserve Status
Jul 13, 2009 Make Money Online
Market Brief
The dollar rose across the board on a return in risk aversion as equity markets dipped lower in the US and Europe, with the Dow off 39ppts or 0.48% and the DAX fell 5ppts or 0.09%. The EurUsd dropped 100pips to 1.39 as the dollar advanced on eroded risk appetite, a completely reversed trend from the last session. The GbpUsd tumbled 160pips to 1.62 and trending downward. The UsdJpy edged down 50pips and consolidated around the 92.3 level. Commodity prices were lower across the board with oil under continued pressure and trading at $59bbl, down $1 or 1.66%, and gold off $6 or 0.73% to $909oz compared to $934oz from the week open. 10yr yields rose to 3.41% on the back of the flight-to-quality play.
Market sentiment is at a delicate state as traders seek confirmation of the economy is bottoming out. The dollar and yen strengthened across the board on muted risk appetite, as equity markets in Europe the US weakened. The ebbing risk appetite was buoyed the Michigan Consumer Sentiment Index, which declined to 64.6 vs 70.5 forecasted, signaling expectations toward a recovery is flattering. Traders remained focus on risk sentiment and the dollar reserve status. The G8 meeting on Thursday did not announce any specific statement addressed the dollar after China’s President Hu Jintao left Italy early to address domestic unrest. Officials from China called for stability of major reserve currencies without referring to the dollar specifically, tempering concerns about the expected discussion on the dollar reserve status and lending support to the dollar.
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Currency Tech
AUDUSD
R 2: 0.8155
R 1: 0.8039
CURRENT: 0.7762
S 1: 0.7725
S 2: 0.7630
EURJPY
R 2: 134.80
R 1: 132.80
CURRENT: 128.99
S 1: 126.98
S 2: 124.40
USDCAD
R 2: 1.1815
R 1: 1.1725
CURRENT: 1.1640
S 1: 1.1545
S 2: 1.1420
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