Wednesday, 8 Sep 2010

Riskier Currencies Tumble As Investors Turn to Safe-Havens

Following a tumultuous day for riskier currencies, the euro appears poised to drop further in trading tomorrow as investor confidence in the global economic recovery remains shaky. In addition to the euro, which declined sharply against the US dollar and yen, the USD/JPY hit a fresh 15 year low at 83.34.

Traders can expect heavy volatility in the marketplace tomorrow, as news from the UK, Canada and the United States is scheduled to be released. Traders will want to pay particular attention to the UK MPC Rate Statement, as well as the US Trade Balance and weekly Unemployment Claims figures. Should the MPC voice any optimism regarding the current state of the UK economic recovery, the pound may move up in afternoon trading. In addition, moderate improvements in both the US trade balance and unemployment situation are forecasted. Following the release of these figures, investors may be induced to return to more volatile currencies.