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Hello, it's Thursday, 16 February 2012, and I'm Martin Smith with the daily outlook from
UFX Markets.
The US Dollar strengthened versus most major currencies as risk aversion grew following
Moody’s downgrade of Italy, Spain and Portugal, and are now threatening to strip France, the
U.K. and Austria of their top Aaa ratings. As a result the U.S. dollar, the world’s
main reserve currency, rose versus most major peers as investors sought safety. The Dow
rose by 0.03% and the NASDAQ gained by 0.02%. Crude oil rose by 0.10% on concern that tensions
with Iran may hinder Middle East exports and closed at $100.90 a barrel. Gold (XAU) fell
by 0.10%, to close at $1718.00 an ounce.
The Euro fell versus the Greenback after Moody’s Investors Service cut the debt ratings of
six European countries, sapping demand for riskier assets. In addition, Luxembourg Prime
Minister Jean- Claude Juncker, the group’s chairman, said he hadn’t received the “required
political assurances” from Greek leaders that austerity measures will be implemented.
The EUR/USD’s momentum is negative below 1.3250 and as long as the pair is trading
below this the Euro may continue to weaken. Overall, the EUR/USD traded with a low of
1.3079 and a high of 1.3215.
The Pound dropped the most in a month versus the US Dollar as Moody’s Investors Service
said that Britain risks losing its top-grade credit rating if the economy deteriorates.
The GBP\USD’s momentum remains bearish below 1.5770. The next support level on the 4 hour
chart is at 1.5650 and breaking this will probably cause the Pound to decrease toward
1.5600. Overall, the GBP/USD traded with a low of 1.5644 and a high of 1.5789. Today,
BOE Gov. King is expected to speak.
The yen fell to a three-month low versus the dollar after the central bank increased its
asset-purchase fund to 30 trillion yen, expanding economic stimulus measures for the first time
since October. The BOJ also said it will target 1 percent inflation “for the time being.”
The USD/JPY’s momentum is bullish as long as the pair is trading above 77.80. Overall,
the USD/JPY traded with a low of 77.47 and a high of 78.53 No economic data is expected
today.
The Canadian Dollar gained versus its US counterpart as the currency of the nation’s biggest
trade partner, the U.S. climbed and crude oil, Canada’s biggest export, reached a
three-week high. As long as the pair is trading below 1.0040, the US Dollar’s momentum is
still negative. Overall, the USD/CAD traded with a low of 0.9978 and a high of 1.0026.
No economic data is expected today.