Hello, it’s Thursday, January 12, and I’m
Martin Smith with the daily outlook from UFX Markets.
The Dollar gained versus most majors as concerns regarding the European debt crisis raised
demand for safety. France’s Credit Rating faces downgrade risks which could lead the
European economy into a deeper recession. NASDAQ gained by 0.31% and Dow Jones declined
by -0.10%. Crude Oil declined by -1.13% closing at $101.08 a barrel. Gold (XAU) gained by
0.71% closing at $1,643.10 an ounce. The Euro dropped to a 16 month low versus
the Dollar over speculations France’s credit rating may be downgraded leading to an even
worse debt crisis. Overall, the EUR/USD traded with a low of 1.2660 and with a high of 1.2790.
Today, Industrial Production is expected with -0.2% versus -0.1% prior.
The British Pound fell versus the Dollar and the other majors after Trade Balance showed
a larger than expected deficit, leading to more bets on another stimulus plan. Growth
in the U.K has been slowing and the BOE might be forced add more stimulus to spur growth.
The main trend for GBP/USD continues to be bearish unless it crosses above the 1.55 resistance.
Overall, GBP/USD traded with a low of 1.5319 and a high of 1.5487.
The Yen finished unchanged versus the Dollar and stronger versus the Euro and the Pound
as debt concerns lower the appetite for risk. Technically, USD/JPY has been trading downwards
but is located near a strong support level according to the daily chart at 76.60 and
could retrace. Today, M2 Money Stock is expected is expected with 3.1% versus 3.0% prior.
The Canadian Dollar weakened slightly versus the U.S Dollar as more concerns regarding
the European debt crisis increased demand for the Greenback. More tension in Iran and
upcoming sanctions could lead to a steep rise in Oil prices which is likely to support the
strength of the Canadian Dollar. Today, NHPI is expected unchanged at 0.2%.