The dollar rose in the middle of the European session recording the highest in more than two months, mainly supported by the dominating fears in financial markets regarding the sovereign debt crisis in the euro zone. The announcement by the prime minister of Greece, George Papandreou, of forming a new government has increased fears, as Papandreou is trying to gain confidence in the new austerity plan which was opposed by the Greeks, and this ciaos prompted investors towards purchasing low-yielding currencies.
The USDIX index is currently trading around 75.80 levels, recording the intraday high at 75.95 and the low of 75.44.
The euro continues it fall against the dollar since yesterday affected by Papandreou’s announcement and also comments from Ireland’s finance minister, Michelle Noonan, about the need for the private sector to shoulder the losses of Angelo Irish Bank Corp and Irish Nationwide Building Society which was supported by the government during the last two years.
Fundamentals showed today the stability in the consumers’ prices in the euro zone during last month, and the ECB’s monthly Bulletin confirmed what was said by Trichet in the last conference, in addition to rising inflation expectations during 2011 and 2012, and steady growth expectations during 2011 and 2012.
The pair is currently trading around 1.4105 recording the highest at 1.4201 and the lowest at 1.4072 compared to the opening at 1.4179 and technically the pair is expected to continue its downside move towards 1.3970 provided settling below 1.4280.
Sterling fell against the dollar after the reported slump in retail sales in May which was lower than expectations and the previous reading, indicating the weakness in the spending in the kingdom affected by the weak labor market.
The pair is currently trading around 1.6105 recording the highest at 1.6225 and the lowest at 1.6097 compared to the opening at 1.6193 and technically the pair is expected to continue the bearishness provided settling below 1.6320 targeting 1.6045.
The dollar fell against the Japanese yen to 80.70 recording the highest at 81.05 and the lowest at 80.45 compared to the opening 80.93 and technically the pair is expected to continue the intraday downside move targeting 79.65 provided settling below 82.00.