Tuesday, 25 May 2010

EUR Drops against Majors

The EUR neared a four-year low against the U.S. dollar and hit a 8-1/2-year trough against the yen on Tuesday after Spain's weekend takeover of a small bank fanned fears the euro zone's sovereign debt crisis is spreading. The dollar and yen rallied as global stock prices tumbled and tensions in the Korean peninsula escalated, prompting investors to flock to the USD and JPY for safety.

The EUR is currently trading lower against the JPY by nearly 50 pips at 110.15. It is also trading lower against GBP and USD, as traders feel that the U.S. currency is an unstable bet for today.

Tomorrow, forex traders cannot afford to overlook, a batch of data is expected from the leading economies. Both the Durable Goods Orders and New Home Sales will be released at 12:30 GMT and 14:00 GMT respectively, promising an extremely volatile trading day. Traders should take advantage of this unique opportunity and use the volatile market in order to capitalize profits