NEWS / Foreign Debt

Dollar closes the week low

By Marc Spaelti - ACM Senior Trader Yesterdays News and Events: The Dollar continued to get jerked around on economic data releases. Friday it was a weaker than expected US 2nd quarter GDP of just 2.5% that lead to a new Dollar sell-off. EURUSD again traded up to 1.2770 but this time around the pair held these high levels to close the week bid. Cable mirrored the Euros price action, trading up to 1.8670 and closing the week high. While both currency pairs have formed a double-top at the high of last week, they are currently still holding short-term bullish trends and we suggest staying long Currencies for now, as the next test higher should witness an accelerated rise. The ECB will hold their interest rate meeting on Thursday. Beliefs that another hike to 3.0% is due should keep the Euro bid in early stages this week. The BOE will also hold its monthly interest policy meeting this week, they are not expected to change rates. Meanwhile speculation whether the FED could still hike rates next week is in full swing after doves point to the weak GDP data as final confirmation that the FED has done enough over the past 18 months. An outlook that US rates could sit at 5.25% while EU rates will continue ascending towards 4% certainly add some strain to the Dollar. Todays Key Issues: UK Net Consumer Credit data for June is due at 9.30amGMT. They are expected to come in at a slightly lower GBP 1.1Bln, down from 1.2Bln the previous month. Euroland July Consumer Confidence due at 10am is expected a notch higher at -8 from -9 in June, UK Consumer Confidence 30 minutes later is to remain unchanged at -4. At 4pmGMT the US July Chicago PMI Index is believed to shed just 0.5 points to 56.0. The Risk Today: EURUSD: High weekly close above 1.2730 leaves the pair bullish, short-term rising trend-line at 1.2700, key support 1.2665. Next try at 1.2770 should lift the pair to 1.2820, target this week is 1.2860. 1-H GBPUSD: Short-term bullish trend has support-line at 1.8615 this morning, 1.8670 was top on Thursday and Friday, the next try should give way for higher levels, target this week is 1.8850. Failure to move on higher from here risks a return to 1.8530 key support. Printer-Friendly Version Send This Page Add to Favorites Comments Prev All News Category News Next