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Euro Finds Support as Stock Selling Continues

Last week’s Currency Trading Review

The Dollar fell sharply against the majors as US economic data soured investor appetite for the safe haven. June CB Consumer Confidence fell to 52 vs. 62 previously and May ISM Manufacturing slipped to 56.2 vs. 59.7 previously. Also very weak, May Pending Home Sales -30% m/m. US Jobs data was little better with -125k losses vs. +433k previously. As stock market fell however, the Dollar was stronger then risk currencies which tracked the slumping Oil lower. The Euro rallied aggressively as Eurozone banking concerns receded after successful refinancing from the ECB on Wednesday and Thursday. When US data weakened as well the catalyst for a major rally saw the Major move from 1.22 to 1.26 in 48 hours. EUR/GBP was also on the move as short covering pushed the pair back to 0.8300. The EUR/USD gained +1.56% closing at 1.2565, after opening the week at 1.2369.

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Forex currency price chart of GBP and USD

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Stock Markets Under Pressure — Risk Off

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) with the US away on Holiday today the market took most of its cue from Europe which traded with a heavy tone. With the weak sentiment still remaining from Friday’s Non Farm Jobs Report the market will be looking to today’s ISM Services number for more information about the state of the US economy. In US stocks, DJIA -46 points closing at 9686, S&P -4 points closing at 1022 and NASDAQ -9 points closing at 2091. Looking ahead, June ISM Services forecast at 55.1 vs. 55.4.

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Forex currency price chart of USD and JPY

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USD Tumbles on Weak Economic Data

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) in a break with recent correlations the USD was sold off yesterday even as the stock markets came under heavy selling pressure at the start of US session. The movement was extreme especially on the Euro which gained more than 300 pips over a 12 hour period. Weekly Jobless Claims came in at 472k vs. 454k previously. In US stocks, DJIA -41 points closing at 9732, S&P -3 points closing at 1027 and NASDAQ -7 points closing at 2102. Looking ahead, June Non Farm Payrolls are forecast at -110k.vs 431k previously. June Unemployment Rate is forecast at 9.8% vs. 9.7%.

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