Thursday, 27 May 2010

Euro and Commodities Rise in Evening Trading

Following news that China has denied allegations that it is looking to reduce its Euro-zone sovereign debt holdings, the Euro shot up against its major counterparts in afternoon trading. Additionally, the U.S. Preliminary GDP Report came in well below expectations, while the American unemployment figure came in higher than originally forecasted. Immediately following the U.S. news releases, the Euro fell against the Dollar as investors reverted back to safe haven assets. Soon after, the Euro was able to take advantage of the news out of China, and move up against the greenback. EUR/USD shot up almost 200 pips during the course of the day. Currently the pair is trading around the 1.2385 level.

Crude oil also saw a volatile trading day today, rising from 70.87 in early morning trading, to its current price of 74.45. Investors shifted gears during the mid-day session to riskier assets like oil, following the news that China voiced confidence in the Euro-zone economies. Tomorrow, a relatively slow news day will likely lead to low volatility in the marketplace. Traders will want to pay attention to any erratic price movements, especially among the riskier currencies like the Euro and U.K. Pound.