Forex Market Review: Daily Forex Analysis 2010-08-04

Forex Market Review & Analysis by Finexo.com

The Dollar fell yesterday against most of its major counterparts amid concerns that Europe’s and Asia’s economic recovery will outpace that of the U.S. Moreover, two reports yesterday, a drop in pending home sales and dip in factory orders, have added to the recent string of disappointing U.S data.  The number of contracts to purchase previously owned houses fell 2.6% in June, signifying that demand continues drop since the expiration of a homebuyer tax credit. Analysts had expected the index to fall 0.5%; however, June’s figure is substantially better than the 30% drop seen in May. Meanwhile, U.S Factory Orders fell 1.2%, more than then expected dip of 0.2%.

Up ahead today, the U.S will release its ADP Non-Farm Payroll, a report showing the change in the number of jobs in the private sector. Generally, considered a predictive index for Friday’s Non-Farm Payroll report, the ADP index rose a disappointing 13K last month. This time around, analysts predict a larger gain – 38K.

EUR/USD

The Euro fell against its American counterpart in this morning’s session, slipping from a 3-month high, as concerns escalated over strength of the U.S. economic recovery. The single European currency touched on $1.3203 in the late Asian trade, a daily low. Yesterday the Euro rose above the $1.3200 mark after rebounding at $1.3180. The single European currency hit $1.3240 during the New York session, 0.30% above today’s opening price.

Fundamentally, the ADP figure could have a strong impact, by molding expectations for Friday’s highly awaited Payroll figure. Therefore, any significant deviations on the upside could boost the Dollar and lead to declines for the pair.

GBP/USD

The Pound managed to return above the $1.59 level, after slipping from $1.5969, a 6-month high, following the U.S’s pending home sales report. The British currency hit $1.5905 during European sessions, up 0.12% after falling from a daily high of $1.5967. Up ahead today, the UK will release its Service PMI. Last month, this service indicator slipped to 54.4; this time around, analysts expect a slight increase to 54.8.

Forex Market Review & Analysis by Finexo.com

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