Thursday, 12 Aug 2010

Euro May Be Bouncing Back Following US Unemployment Report

Following a worse the expected European Industrial Production report, as well as a poor Italian trade balance figure, the euro fell against the safe haven currencies during morning trading. Since this morning, EUR/JPY has fallen some 100 pips, while EUR/USD has dropped around 85. Currently, the pairs are trading around 109.80 and 1.2850 respectively.

Meanwhile, the dollar was able to pair its earlier losses against the yen today following news that the Japanese Prime Minister is concerned about the rapid ascension of the yen. Japan is a largely export driven economy, meaning an overvalued yen is not good for the economy. USD/JPY currently stands at 85.50.

Traders will want to pay attention to both the EUR/USD and EUR/JPY pairs for the rest of the day. While there is no major news events scheduled, a worse then expected U.S. Unemployment Claims report released at 12:30 GMT, may give the euro the necessary momentum to recover against the greenback and yen. Whether this may start a renewed bullish trend for the euro is yet to be seen.