Wednesday, 16 Jun 2010

Risk Aversion Returns Following Disappointing U.S. News

The U.S. Building Permits figure as well as the latest Housing Starts number came in well below expectations earlier today, leading investors to sell off riskier assets in an attempt to limit their losses. Consequently, the Euro fell against most of its main currency rivals. EUR/USD fell as low as 1.2279 from this morning's high of 1.2342. The pair has since staged a slight recovery and is trading around the 1.2305 level. The Euro also fell against the Yen, while the greenback registered gains on both the Aussie and Canadian Dollar.

Traders will want to pay attention to the U.S. Crude Oil Inventories report at 14:30 GMT as well as speeches from both the Bank of England Governor and the Fed Chairman at 21:45 GMT. All three events should lead to market volatility, with the speeches in particular likely to generate heavy trading among USD pairs. Any positive news regarding the U.S. economy from the Fed Chairman may give the Dollar some gains.