Forex Analysis: Wall Street Makes a Push

The United states dollar gained against the EUR ahead of the ECB press conference anchored by President Trichet. While signaling a possible rate increase in July, the ECB President in addition added that inflation looks ready to moderate. This left investors with the belief that even if the ECB increases its interest rate in July it is more likely to be a singular event and not duplicated anytime soon. Trichet will finish his term as the ECB President in October. Trichet also encountered difficult questions about Greece and was not able to supply a clear picture as to how the debt crisis will be remedied. Germany will release inflation stats today and this may prove interesting for traders, the Final CPI figure from Germany is expected to be unchanged with a result of 0.00%. The WPI from Germany is expected to gain 0.5%. The Euro has done astonishingly well the past two weeks considering the quantity of unpleasant news that continues to result from Greece and other European countries which experience debt woes. Thursday’s trading may point to the chance that investors had by now digested the concept that a rate hike may come from the ECB in July, but they failed to get a green light for further increases after that.

The USD although still trading in the weaker areas of its near term trend up against the Euro did locate some support. The Fed has delivered no indicators that it is going to unleash an additional round of quantitative easing. Investors worry additional erosion in economic figures from the U.S. and the tension that may unfold with specific politicians inquiring to place an additional round of stimulus available. Weekly Unemployment Claims turned out to be disappointing yesterday coming in with a result of 427k in comparison to the estimation of 424k. Trade balance numbers did turn out better for the States and many analysts said this is what triggered a positive run on Wall Street. Nevertheless, the major indexes have been hit hard the last month and a half and the increases on the major indexes yesterday could have been purely some bottom feeding taking place by speculative investors. Wall Street enters into today’s session with the chances of finishing lower its sixth week in a row. There will be no major economic data from the U.S. today and traders will have to count on existing sentiment while they make their decisions prior to going into the weekend.

The Forex and Commodities markets proved volatile on Thursday with the Central Bank pronouncements from the ECB and BoE. The price of Gold is trading near 1541.00 USD as of this writing. Crude Oil has also continued to mount a few gains in the wake of a lack of unity from OPEC relating to production objectives. Commodity prices were likely speculative yesterday depending on prevailing ranges being verified. Predictions for the global economies are varied at best at the moment and this means that physical resources and their higher values will be put to the test within the coming weeks.

The AUD performed especially well yesterday as it obtained some of its lost ground from earlier this week, even so the Australian currency continues to view a swift market and it is certain to deal with ongoing pressure if economic stats lags further. The JPY stayed stuck in its consolidated range on Thursday and this came in the wake of further negative reports from Japan concerning its potential.

The Gbp did deal with downward stress yesterday. The BoE astonished no one when it remained waiting in place concerning its monetary policy. The U.K. will continue to face tough questions similar to its counterparts regarding growth and austerity. Today the U.K. will submit Manufacturing Production and inflation information. The manufacturing sector indicates deficiencies in vigor and today’s number is expected to be unchanged. The GBP stays in a rather range bound sphere against the USD. The real opportunity for traders will come from evaluating the Gbp against the EUR.