Tuesday, 28 Dec 2010

Euro Recovers Against USD Amid Thin Trading

The low volatility that has been in the market place since late last week remained during the morning session today. Still, the euro was able to stage a recovery against the US dollar, although it continued to fall against the yen. The EUR/USD pair has gone up over 50 pips since this morning, and is currently trading at 1.3265. The EUR/JPY pair has fallen some 35 pips in the same amount of time and is currently trading right around the 108.60 level. Analysts attribute the erratic behavior to the low levels of liquidity we are currently seeing in the marketplace. Traders are warned that these types of movemements may continue for the remainder of the week.

Turning to the rest of the day, we may see some volatility around 15:00 GMT when the US CB Consumer Confidence figure is released. As the sole significant piece of news today, traders should be aware that its impact may be inflated. Analysts are forecasting an increase in consumer confidence since last month, meaning the dollar may see some gains in evening trading.