The Euro experienced a volatile US session, as it reached a new 15 month high against the greenback to peak at 1.4518 in the early parts of the session, closing in on a critical resistance level of 1.4577 – the January 2010 peak. The Euro dropped back down by some 75+ pips to a session low of 1.4436 before steadying off around the 1.4487 levels. Support for the single currency, which has gained in the past week following an increase in the ECB’s interest rates, is seen around the 1.4404 area, which represents the January 17th high and is also very close to the 76.4% Fibonacci retracement level of the November 29th, 2009 to June 6th, 2010 drop.
The Sterling had a sudden surge in the weakening of the US session, gaining some 70 pips to reach a session high of 1.6328, but soon after continued in the momentum seen in previous sessions, that is to say in a downward motion. The GBPUSD pair is currently trading around the 1.6258 levels. Against the Euro, the British pound reached a 5 and a half month low as the EURGBP pair surged to 0.8914 in the latter part of the US session, spurred on by a surprise drop in the UK inflation rate, which dented speculation of a near term rise in interest rates.
The Swiss Franc continued gaining against the Dollar, as it had done so in today’s previous sessions, pushing the USDCHF pair to a 3 and a half week low of 0.8941, some 46 pips above the all time low of 0.8895 reached last month. The worsening of Japan’s nuclear situation has prompted investors to seek comfort in the safe haven currency, the Swissy. The dash for a low yielding currency at such times of uncertainty is however believed to be short lived, as recent events have left the market somewhat immune to ongoing natural/political disasters/frictions.
The Canadian Dollar weakened against the USD in today’s sessions, as the Bank of Canada held its interest rates unchanged at 1% – an event often perceived as a bearish move by the market. Comments from the Central Bank, re-affirmed the view that interest rates will remain unchanged even in May. The recent peace talks in the North of Africa further helped the USDCAD pair to rise as Oil prices dropped by over $4 per barrel.
Gold experienced a drop of over $22 per ounce in today’s US session, following a sharp drop in crude oil which also saw the commodity drop by over $4 per barrel, as a bearish forecast from Goldman Sachs dragged the metal further down from record highs. Gold is currently trading around the $1452.7 levels after recuperating some losses from having dropped to as low as $1444.0 in the wake of the US session.