Friday, 13 May 2011

Dollar and Yen Strengthens as Commodities Tumble

The U.S. dollar and the Japanese yen gained against all of their major currency counterparts on Friday as commodities and stocks fell, increasing demand for safe-haven assets.

The euro saw another bearish session today and is headed for a second weekly loss against the dollar on concerns that Greece will seek for an additional rescue package. Investors prefer to reduce their risk-exposure due to the uncertainty regarding the Greek economy, and prefer to open long positions on the dollar and the yen.

The euro fell about 250 pips vs. the dollar today, and the EUR/USD reached as low as the 1.4066 level. The euro also saw a 300 pip fall against the yen, and the EUR/JPY cross bottomed near the 113.50 level.

Looking ahead to next week, the most relevant financial topic in the market will most likely remain the Greece debt concern. Traders are advised to follow any update on this issue, as any release it likely to have a significant impact on the market.