Wednesday, 22 Jul 2009

EUR and GBP Reversal Being Anticipated

Surprisingly, the opening of the US markets is not set to influence the direction of the major currencies today. The EUR/USD appears on track to continue climbing, though some analysts are forecasting a return to the safety of the Dollar, which would then bring this pair back towards 1.40. For now, however, the uptrend remains.

Industrial orders in Britain and Europe fell this past month, possibly due to the climbing EUR and GBP, which decreases export capability. While not carrying much of an impact on the forex market, these reports do offer an insight in to what may come. As industry seems to be suffering from recession, as well as damaged export capacity from a strong currency, the notion of a downward move in both the Euro and Pound may not be too far off the mark.

The British Pound also received a modicum amount of support from the unanimous vote to maintain interest rates at their current level, a decision delivered from the Bank of England's Monetary Policy Committee (MPC) earlier today.

To end today's news cycle, Federal Reserve Board Chairman Ben Bernanke is due to testify at 14:00 GMT to the Senate Banking Committee in Washington D.C. regarding his semi-annual monetary policy report. Seeing as he is merely reading the same testimony given to the House Banking Committee yesterday, the results on the currency market will hardly be felt, only reinforcing current trends.