iFOREX | Jun 26, 2013 06:23AM ET
While many investors thought the U.S. Dollar would trade low on Tuesday, better than anticipated economic data changed their minds. Reports indicating that Consumer Confidence and Factory Orders went up prompted the greenback to rally against the majors. The U.S. monetary unit had started off weak after China indicated that it plans to maintain its money rates at “a reasonable level.” The currency advanced as a release confirmed that Consumer Confidence went up from 74.3 to 81.4, reaching close to a five-year high, suggesting that spending would likely increase as well. Furthermore, the Commerce Department stated that Durable Goods Orders rose 0.7 percent in May and Core Durable Goods Orders, which does not include items related to transportation, climbed 3.6 percent. The Department also showed that New Home Sales went up 2.1 percent while Home Values went up by 10.9 percent in March. Despite the fact that sales slowed down a bit, the figures were still better than forecast. Meanwhile, Gold Prices went down after the U.S. released solid data on Housing and Consumer Confidence and they dipped further as the U.S. reported better than predicted metrics on Durable Goods Orders.
In the Euro region, the shared currency was affected by comments issued by the European Central Bank’s President, Mario Draghi, who suggested that the region’s growth outlook still warrants the implementation of more stimulus. This came as a surprise to investors, given a recent hike in European yields and the uncertainty it brought on. Analysts believe that policy makers will continue to adhere to loose monetary policies. The Euro edged lower versus the greenback subsequent to the release of economic data out of the U.S. The British Pound also erased previous gains versus its U.S. counterpart after the U.S. reported better than forecast figures on Housing, Factory Orders and Sentiment among consumers.
The positive data out of the U.S. boosted the greenback against the Yen, while the Japanese currency slipped versus the British Pound and the Euro. The greenback had weakened against the Yen earlier in the day as officials from the Federal Reserve tried to downplay the possibility the central bank may reduce stimulus. Narayana Kocherlakota, President of the Federal Reserve Bank of Minneapolis, indicated that the bank will remain on the same path regarding monetary policy until the rate of Unemployment declines.
Lastly in the South Pacific, the Australian Dollar traded mixed but reached the highest level of volatility in close to 18 months as market investors wondered whether to opt for or shy away from high risk assets amid concerns over China’s credit crunch. The New Zealand Dollar remained almost unchanged against its U.S. peer as investors traded cautiously in light of the troubles brewing in China’s financial system.
EUR/USD- Comments Weigh On EUR
The Euro weakened against the U.S. Dollar as demand for the greenback increased following the release of better than forecast data and it continued to trade to the downside as further reports revealed that Consumer Confidence rose as Americans have become more optimistic about their economy. In the Euro-zone, ECB President Draghi suggested that the state of the economy warrants “accommodative monetary policies.” He explained that these will be necessary for as long as Unemployment remains high and Inflation continues to run low. Today, Germany will issue metrics on the Consumer Climate, a leading gauge for Consumer Spending.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.