Introduction to Forex Trading

Daily Forex news (updated 30 July 2010)

The euro rallied above $1.3100 to a 12-week high against a broadly weaker dollar on Thursday as supportive European data prompted investors to bet the European economy is on a better track compared with the United States. The euro's advance started early in the global session after a jump in euro-zone economic sentiment to a 28-month high and a decline in German unemployment.

This contrasted with recent weak data from the United States that has weighed broadly on the U.S. dollar. Investors are mindful of figures on Friday expected to show slower second- quarter growth in the world's largest economy. In late afternoon New York trade, the euro was up 0.7 percent at $1.3077. The single currency briefly traded at $1.3106, its strongest since May 4. The euro has risen around 7 percent versus the U.S. dollar this month. The next key resistance level for the single currency is seen at $1.3125, the 38.2 percent Fibonacci retracement of the peak-to-trough move from November 2009 to June.

The dollar fell 0.6 percent against the yen to 86.85 yen. It traded in a range of bwteeen 87.51 and 86.58. Southern Hemisphere currencies were active, with the New Zealand dollar gaining 0.4 percent to $0.7238. The kiwi recovered from an earlier fall after the central bank raised interest rates by a quarter point, as widely expected, but warned that further hikes could be more gradual. The New Zealand dollar's recovery was aided by a rise in the Australian dollar, which climbed 1.1 percent to $0.9006.

 Euro, Sterling Continue Attack On Dollar

The dollar remained under heavy pressure versus other major currencies Thursday morning, extending its recent losses versus the euro and sterling.

On the economic front, traders await the customary weekly jobless claims report for the week ended July 23 from the Labor Department at 8.30 a.m. ET, for cues on the health of the job market.

Economists project that jobless claims remain unchanged at 464,000 after unexpectedly increasing by 37,000 in the previous week.

The dollar slipped to 1.3091 versus the euro -- its lowest since May 17. Early in June the dollar hit a 4-year high of 1.1805 but since tailed off badly on speculation the economic situation is Europe is better than once feared.

The eurozone's economic sentiment indicator rose to 101.3 in July from 99.0 in June, the European Commission said on Thursday. This was higher than analyst forecasts for a score of 99.1.

British house prices dropped in July for the first time since February as tight credit conditions and uncertainty over the future economic situation restricted potential home buyers from entering the market.

Still, the dollar continued to fall versus the sterling, dropping to a fresh 5-month low of 1.5662.

The dollar also fell versus the yen, slipping to a 6-day low of 86.72. A move below 86.25 would take the dollar to its lowest in 2010.