Thursday, 28 Apr 2011

Dollar Downtrend Continues

The dollar was off of its lows in European trading as some traders may have looked to take profits from the rally in the Asian trading session. Markets are currently anticipating a large amount of US data to be released this afternoon with the headline event being Q1 GDP.

Both the euro and the pound were off their Asian session highs as the currencies drifted lower. The yen was even versus the dollar. The release of a strong German unemployment change at -37K on expectations of -33K and higher German import prices did little to influence traders this morning. Equities continue to trade higher this morning with the DAX up 0.33%.

Momentum traders are driving the euro higher as traders were more than enthusiastic following Ben Bernanke's comments yesterday, signaling his intention to keep US monetary policy loose.

This afternoon traders will be anticipating US GDP, weekly unemployment claims, and pending home sales.

Both the euro and the pound appear to be oversold as they have yet to correct lower. The euro in particular has traded sharply higher since the rebound from Monday the 18th when an S&P report triggered knee-jerk dollar buying.