Wednesday, 9 Mar 2011

Traders Remain Skeptical of Euro

Investor sentiment toward the euro stayed bearish today, as the EUR/USD remained right around the 1.3900 level. Pessimism regarding the currency is largely due to the renewal of euro-zone debt concerns which have outweighed recent hawkish statements regarding interest rates in the region. In addition to taking losses against the dollar, the euro has also fallen against the UK pound. The EUR/GBP is currently trading at 0.8585.

In other news, the price of crude oil dropped about $1.50 today following the release of a higher than expected US inventory figure. The figure was used as further evidence that demand in the US has gone down due to the recent spike in prices.

Tomorrow, traders will want to pay attention to a batch of news from the UK, including the latest Official Bank Rate. In addition, this week's US Unemployment Claims is forecasted to inject some volatility in the marketplace. Should the figure come in at or below the forecasted 375K, the dollar may be able to extend its recent bullish streak.