Monday, 27 Jul 2009

Dollar and Yen Continue their Decline

Today's trading continues to witness a steady decline of the USD and JPY against their major currency counterparts as stocks rise for an 11th day on speculation the global economy is on the road to recovery from the worst recession since World War II, dampening demand for the safe heaven currencies.

The Yen dropped against almost every major currency as global stock markets hit new highs. The EUR rose to a near 7 week high versus the USD after German consumer confidence report beat economists' forecasts. The Pound snapped two days of declines against the Dollar, trading near the $1.6500 level, after a report indicated that 8 of 10 U.K. regions showed no change in house prices in July from the previous month.

Shortly after the opening of the U.S market, at 14:00 GMT, a government report is expected to show New Home Sales rose 2.9% in June after reaching a record low in January this year, signaling that the housing and manufacturing industry is on the path to recovery despite rising unemployment.

In line with expectations or better than expected results are likely to intensify the current bearish trend on the USD and JPY as well as setting the tone for trading for the week to come, fuelling investors' risk appetite with expectation of further optimistic news.