Global economic data helps the dollar
The USD saw increasing fluctuations in opposition to both its riskier and safe haven currency rivals yesterday, as the combined disappointing German economic data, and the anticipation of future monetary easing in Japan enhanced the demand for the greenback. The GBP/USD was down more than 70 pips during European trading, ultimately reaching as low as 1.5995. In opposition to the yen, the greenback gained close to 90 pips at the first session of the day to trade as high as 87.73, not far from a recent 2 ½ year high.
On Thursday, in addition to Eurozone news, which is expected to create intense market instability, dollar traders should be aware of the US Unemployment Claims figures. The result showed that the U.S. still has a long way to go in showing it is growing rapidly.
ECB holds rates soon after the rise of Euro
On Thursday, the euro rose against the yen and the dollar soon after the ECB kept the interest rates on hold as a direct outcome of the strong demands at an auction of Spanish debt.
Investors believe that the euro has gained as some of them had positioned for a small risk that the ECB may cut down the rates.
There are forecasts that the euro may suffer if the ECB decides a rate cut in the future. It is also anticipated that the euro may rise to $1.35 by mid 2013.
The euro rose 0.8% to hit a session high of 115.85 against the yen, therefore bringing it close to its 18-month high of 115.995 yen hit in early January.
Yen struggles hard to maintain its level
As an aftermath in the increase in bets of an easing policy by the Bank of Japan, the yen has become susceptible to further losses. The USD neared its two and half year’s high against the JPY on Thursday.
The dollar was up 0.4 percent on the day at 88.23 yen, not very far from 88.48 yen hit on Friday last week, its uppermost level since July 2010. The yen gave up nearly all of its gains earlier this week. The pair has been boosted this morning even higher to the 88.98 yen level.
Data which shows strong export growth in China has also punched the low yielding yen as traders searched for higher yielding and growth linked currencies like the AUD.
Strategists feel that there is a definite trend that the weakness of the yen will continue.
Crude Oil hits its 12 week high after Saudi output cut
Prices of Brent crude oil rose above to a 12 week high on Thursday soon after the news of a sharp cut in Saudi oil production, and an explosion in Yemen that has halted most of the country’s oil exports and bullish Chinese trade data.
Earlier Saudi Arabia had slowed down its crude oil production by around 700,000 barrels a day during the last two months of 2012, with its December output in the region of 9 million barrels per day.
Oil flow through Yemen’s main crude export pipeline had stopped on Thursday after unidentified attackers blew it up, sources inform.
As for the demand side, the strong trade data of China has raised the expectations that an economic recovery in the world’s second largest oil consumer would further drive up fuel consumption.