By CountingPips.com
The US dollar has been stronger in forex trading today against the other major currencies as risk aversion has boosted the American currency while pushing stocks and other riskier assets lower. The dollar has been gaining ground on the euro, British pound sterling, Japanese yen, Australian dollar, Swiss franc, New Zealand dollar and the Canadian dollar, according to currency data in the afternoon of the US session.
The US stock markets have had large selloffs today with the Dow Jones industrial average decreasing by over 150 points, the Nasdaq falling by over 35 points and the S&P 500 down by over 20 points at time of writing.
In commodities, oil has traded lower by approximately $3.00 to the $96.37 per barrel level and gold futures have been almost unchanged at the $1524.20 per ounce level.
Much of today’s risk aversion stems from the ongoing confusion and lack of a resolution surrounding the Greece debt crisis and the second bailout package. The Moody’s rating agency said today that it might downgrade some French banks with exposure to Greek debt liabilities while protests have broken out in Greece over the austerity package being implemented to cut their debt.
Key US data released today showed that consumer prices rose more than expected in the month of May, according to the US Department of Labor report. The consumer price index increased by 0.2 percent (YOY +3.6%) following a gain of 0.4 percent in April and surpassing forecasts expecting a 0.1 percent gain. The core reading, excluding food and energy prices, rose by 0.3 percent (YOY +1.5%) following April’s 0.2 percent rise and also beating forecasts looking for a 0.2 percent advance.
Also released out of the US was the Empire manufacturing survey which fell much more than expected and showed that manufacturing activity slowed in June. The survey fell to a -7.79 score for June after having registered a 11.80 reading in May and was forecasted to reach a 12.00 score for June.
EUR/USD Forex Daily Chart – The euro has dropped more than 1 percent today versus the dollar in trading as the EUR/USD pair has fallen from the 1.4400 level to trading under the 1.4200 level in the US afternoon session. Further depreciation of the euro could see the pair descend to the 1.4050 support level in the coming days with the 1.4250 level providing potential resistance.
