Hello, it’s Thursday, 16 February 2012, and
I’m Martin Smith with the daily outlook from UFX Markets. The US Dollar strengthened versus most major
currencies as risk aversion grew following Moody’s downgrade of Italy, Spain and Portugal,
and are now threatening to strip France, the U.K. and Austria of their top Aaa ratings.
As a result the U.S. dollar, the world’s main reserve currency, rose versus most major
peers as investors sought safety. The Dow rose by 0.03% and the NASDAQ gained by 0.02%.
Crude oil rose by 0.10% on concern that tensions with Iran may hinder Middle East exports and
closed at $100.90 a barrel. Gold (XAU) fell by 0.10%, to close at $1718.00 an ounce. The Euro fell versus the Greenback after Moody’s
Investors Service cut the debt ratings of six European countries, sapping demand for
riskier assets. In addition, Luxembourg Prime Minister Jean- Claude Juncker, the group’s
chairman, said he hadn’t received the “required political assurances” from Greek leaders
that austerity measures will be implemented. The EUR/USD’s momentum is negative below
1.3250 and as long as the pair is trading below this the Euro may continue to weaken.
Overall, the EUR/USD traded with a low of 1.3079 and a high of 1.3215. The Pound dropped the most in a month versus
the US Dollar as Moody’s Investors Service said that Britain risks losing its top-grade
credit rating if the economy deteriorates. The GBPUSD’s momentum remains bearish below
1.5770. The next support level on the 4 hour chart is at 1.5650 and breaking this will
probably cause the Pound to decrease toward 1.5600. Overall, the GBP/USD traded with a
low of 1.5644 and a high of 1.5789. Today, BOE Gov. King is expected to speak. The yen fell to a three-month low versus the
dollar after the central bank increased its asset-purchase fund to 30 trillion yen, expanding
economic stimulus measures for the first time since October. The BOJ also said it will target
1 percent inflation “for the time being.” The USD/JPY’s momentum is bullish as long
as the pair is trading above 77.80. Overall, the USD/JPY traded with a low of 77.47 and
a high of 78.53 No economic data is expected today. The Canadian Dollar gained versus its US counterpart
as the currency of the nation’s biggest trade partner, the U.S. climbed and crude
oil, Canada’s biggest export, reached a three-week high. As long as the pair is trading
below 1.0040, the US Dollar’s momentum is still negative. Overall, the USD/CAD traded
with a low of 0.9978 and a high of 1.0026. No economic data is expected today.