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Possible QE3 announcement boosts high-yielding currencies

Published 08/22/2011, 07:31 AM
Updated 08/22/2011, 07:36 AM
USD/JPY
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EUR/CHF
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Markets opened on some hopes on expected announcement of QE3 when Bernanke gives a speech this week at an annual central bank conference in Jackson Hole.  

With the sluggish growth in the U.S., Bernanke may announce a third round of stimulus to reinvigorate the economy; the thing which boosted demand on high-yielding currencies and shares.   

The euro led the incline despite the announcement by Merkel that issuing euro bonds at this time would further weigh on economic stability.  

The Swiss franc showed some advance despite talks that the SNB will continue its monetary intervention.

Concerning the EUR/CHF, the pair fell slightly on daily basis to trade around 1.1345, after recording a high of 1.1365 and a low of 1.1264.

Moreover, the yen declined against majors on talks from the Japanese Finance Minister that the BoJ may intervene strongly to curb the yen's appreciation after it advanced to all-time high against the dollar.

The dollar, on the other hand, retreated against a basket of major currencies to a low of 73.81 compared with the day's opening at 74.07, according to the dollar index after lackluster reports last week which worsened the growth outlook for the U.S. economy.

Concerning the USD/JPY, the pair halted the downside direction, performing a slight rebound to the upside, to trade around 76.75 after recording a high of 77.20 and a low of 76.54.

The trading range for today is among key support at 75.80 and key resistance now at 78.45.

Moving to the British pound, it rebounded after two sessions of decline to currently hover around 1.6495.  

Amid the absence of fundamentals from major economies, the pair has followed the general sentiment ion the market.

So far, the pair has touched a high of 1.6509 and a low of 1.6463, whereas the trading range for today is among key support at 1.6225 and key resistance at 1.6680.

 

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