Tuesday, 23 Mar 2010

Stocks Swing to Session High Pulling the Euro Higher

Trading during the New York session was volatile today as the dollar pulled back from its highest point against the euro after a boost in stocks and strong existing home sales helped the euro and other higher yielding assets pick up lost ground from the European trading session.

The EUR/USD was trading at the 1.3500 after opening the day at 1.3577. The USD/JPY traded higher at 90.39 from 90.30. Spot crude oil was also trading higher at the price of $81.75 from its earlier price of $81.47.

Stocks rose today to a session high and subdued any further rally of the dollar after the release of last month's U.S. existing home sales. The economic indicator posted results that just topped analysts' expectations. 5.02M existing homes were sold last month on forecasts of 5.01M homes.

The major currencies have been trapped in relatively tight trading ranges as the market continues to wait for a resolution to the Greek debt problem. However, the EUR/CHF continues to plummet. The currency pair has dropped to an all-time low. A continued deterioration of the euro versus the Swiss franc was expected until intervention from the Swiss National Bank is made to stop the freefall. The EUR/CHF has shed 2.5% over the past two weeks.

Traders should be ready for tomorrow's news heavy trading day. A glut of data is set to be released. Highlighting tomorrow's trading will be the U.S. core durable goods orders and new home sales. Also to be released will be Britain's annual budget and the weekly crude inventories report. Positive numbers from the States could push the EUR/USD lower towards its next support level of 1.3465.