By TraderVox.com
Tradervox (Dublin) – The Forex markets were quiet in the Asian session with the Euro, Pound, Yen and the Franc trading flat. However bullish momentum was visible in the commodity currencies, Canadian Dollar and the Australian Dollar, supported by Chinese government comments to take on measures to boost growth, thereby driving up demand for commodities.
However the gains in the commodity currencies did not spill into the European session. In fact the Canadian Dollar and Australian Dollar reversed gains and turned bearish. Gold and silver which were in tight bounds saw bearish sentiments into the European session. The reason for this was huge dollar inflows on the back of risk aversion driving up the dollar index to 81.3 levels.
Risk aversion already supported by Europeans saw further support coming in from the Japanese. The Fitch rating agency has downgraded Japan by one notch to negative on rising debt concerns in the country. This has led to strong outflows from the safe haven Japanese Yen to the US Dollar.
US dollar remains as the sole safe haven which is enjoying strong inflows backed by the strong revival in the US economy and the recovery in housing market.
The major releases today were the UK CPI and UK Core CPI. Consumer prices in the UK rose from the previous 0.3% to 0.6% as expected while the Core CPI fell from the previous 2.5% to 2.1% beating expectations of a fall to 2.0%. After the CPI data there was a huge selling in the GBP/USD pair driving the pair to 1.57648 levels where the pair found support.
Moving into the US session, the US economy posted the home sales data which showed a huge improvement, beating expectations to rise to 3.4% from the previous -2.8%.
This has resulted in outflows from traditional safe havens Gold and Yen into the Dollar.
Tomorrow the European leaders meet in Brussels for talks regarding the European Debt crisis. Greek Exit and Euro bonds are likely to be on top of the agenda. Markets do not however expect any meaningful output, as had happened with previous summits.
Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management.
Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox
