If this is a dollar recovery, as the fundamental suggest, it’s an odd one.

Foreign Exchange - Pounds Sterling and Euro Exchange Rate Outlook

The dollar exchange rate is stronger against the euro exchange rate this morning, from a minor intermediate high late yesterday at 1.3267 to a low of 1.3125 just after Europe took the baton from Asia. The euro rate looks choppy on the hourly chart but Europe keeps putting out bad news as well as evidence of conflict within the ECB, and sentiment is turning against it.

The interesting development is in the US Dollar/yen, where the seeming downside dollar selling breakout peaked at a dollar low of 98.13 on Tuesday and stumbled upward to 99.99 early yesterday but back to 98.50 overnight. If this is a dollar recovery, as the fundamental suggest, it’s an odd one. The reason seems to be cross-rate action. Overnight the euro-yen hit a fresh two-week low at 129.33 (from 134.21 on Monday) and that dragged the dollar down, too. Nobody really understands the euro/yen move and the commentary at various places is all but incoherent. Since the big Asian news today, expected since Monday, was the Chinese GDP, everyone blames that - but GDP was actually a tad better than forecast, and nobody knows what it means.

Pounds to US Dollars = 1.4892
Pounds to Euros = 1.1285
Euro to Pounds = 0.8855
Pounds to Australian Dollars = 2.0676

Bye For Now

Barbara Rockefeller
Foreign Exchange Trading
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