Thursday, 22 Jul 2010

Euro Reverses Yesterday's Losses Following Stock Market Rally

A day after the Fed Chairman warned of a possible lull in the global economic recovery, risk taking returned to the market place following a series of positive economic indicators released today. The release of surprisingly strong European manufacturing data as well as the British retail sales figure caused investors to abandon their safe haven assets, in favor of more volatile currencies. EUR/USD shot up over 100 pips since this morning, and has currently settled around the 1.2890 level. GBP/JPY saw a similar upward trend throughout the day, rising over 150 pips. The pair is trading steadily at the moment around the 132.80 level.

Tomorrow, traders will want to pay attention to a series of economic indicators likely to create heavy market volatility. The German Ifo Business Climate, as well as the Preliminary GDP Report from the U.K. are both forecasted to show gains in the European economies. Should the predictions prove true, traders can expect riskier currencies like the EUR, GDP and AUD to maintain their bullish trends going into the weekend.