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Market Review:
Euro, Cable, Aussie Under Review
In a daily market review with TheLFB trade team, Dan Cook, Snr Market Analyst at IG Markets, looks at the potential in two European and one Asian based currency pair. Catch Dan, and TheLFB trade team on ForexTV Live.
EUR/USD – After the first full day of trading to open the New Year which saw the euro rise rapidly versus the dollar, this pair has settled down substantially and moved into a sideways trading range. The German Unemployment Change was much better than expected and showed that the largest contributing economy to the Euro-zone had 3K fewer unemployed persons than the previous month.
The euro received a slight kick up on this news; however, was still held back by a previous month revision in the data that went from 7K fewer unemployed to only 1K. This was the 6th straight monthly drop in German Unemployment which is a very positive trend; however, with an estimated 3.42 Million persons still out of work, it may be a little too early to celebrate.
GBP/USD – Through the early morning hours U.S., the pound continued to lose ground against the greenback, dropping below the 1.6000 level before finding any type of support. Driving sterling lower overnight was a worse than expected Construction PMI reading of 47.1. Anything under the level of 50.0 indicates contraction for this sector and unfortunately, this is the twenty-second successive month the reading has fallen below that level.
A few key points from the report were that New Order volumes had contracted again after an increase in November and staffing levels were cut again. Even so, it appears that most purchasing managers “remain confident that 2010 will be a much better year for the construction sector and that it will begin to grow again” After the U.S. trading session today, the U.K.’s Nationwide Consumer Confidence figures will be release.
AUD/USD – After yesterday’s brisk run-up of the aussie, which followed skyrocketing commodity prices, the rise pair has slowed considerably with the Usd being the beneficiary of strength in the early U.S. session. HIA New Home Sales figures in Australia showed 0.3% growth in November, versus a decline of 6.0% the previous month. While this was positive news, particularly considering the trickle-down effect the sale of a new home has on the economy, the aussie so far has not been able to sustain its upward momentum.
Gold, Silver and Platinum are all showing positive figures in early morning trading; however, compared to yesterday’s commodity price spike, this looks like a mere blip on the screen. The overnight session will reveal Building Approval numbers from Australia.