Wednesday, 15 Dec 2010

USD Extends Gains Across the Board in Morning Trading

Following yesterday's FOMC meeting, and the subsequent boost the US dollar received, the greenback was able to maintain its bullish momentum throughout the morning session. This is particularly apparent against the Japanese yen. The USD/JPY pair, which has gone up some 30 pips since this morning, looks to have more room to increase ahead of the evening news. In addition, the EUR/USD pair had dropped some 70 pips earlier today, before staging a small correction. Currently the pair is trading around1.3330.

This afternoon, traders will want to pay attention to a batch of news out of the US which is likely to cause volatility in the forex market. First, the Core CPI figure is scheduled to be released at 13:30 GMT. Analysts are predicting a slight increase over last month's figure. If the predictions prove to be accurate, the result could further help the dollar. At 14:00 GMT, the TIC Long Term Purchases figure is set to be released. Last month's figure came in well below expectations, and caused the USD to tumble. Should this happen again today, traders can expect the dollar to erase its recent gains.