Forex: EUR/USD – hung over after yesterday’s 3-week highs

on Jul 11, 2013
Listen Thursday July 11th:_ The EUR/USD started today’s Asian session at 1.3115, slightly lower than the three-week high reached yesterday, and in early European trading has retraced to a current session low at 1.3050, for a fall of 0.65 percent so far.

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The annualised and monthly readings of Germany’s Wholesale Price Index data for June were released at 07:00 BST today, showing a fall of 0.4 percent which mimicked the May drop and missed forecasts for a 0.1 percent drop. The index of selling prices in wholesale trade increased modestly in June after falling for two months in a row. The rise of 0.7 percent reversed declines of 0.1 percent and 0.4 percent in May and April respectively. Analysts’ expectations had been for an increase of one percent.

The US dollar yesterday fell against all the majors when the US Fed indicated that fiscal stimulus was still needed, because the jobs market remains weak and inflation remains too low for comfort, and that the central bank’s accommodative monetary policy would remain for the foreseeable future.
The comments followed release of the minutes of the FOMC June policy meeting, which reveal a lack of consensus among the central bank’s policymakers over when to start a stimulus wind-back. A majority believed that unemployment remained too high to justify any retreat from the Fed’s $85 billion bond purchase program.
Following release of the FOMC minutes the EUR/USD soared to a three-week high at 1.3204, for a gain of 4.29 percent on the day.
The ECB is today at 09.00 BST due to release its monthly report with detailed analysis of the prevailing economic situation.


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