Forex - Euro decline vs. dollar halts after ECB official's remarks

Forex Pros – The euro's decline against the U.S. dollar halted on Tuesday at 1.2666, after a
senior European Central Bank official said the ECB's move to buy government bonds had stabilized frenetic markets.

EUR/USD hit 1.2718 during late European trade, shedding 0.56%, after it pulled back from 1.2666, a 2-day low. The pair was likely to find resistance at 1.3342, the high of March 30, and support at 1.2515, Thursday's low and a 14-month low.

Earlier in the day, Reuters quoted Ewald Nowotny, one of the ECB's Governing Council members, as making the comments in an interview.

"The way how it is moving now it's quite positive," Nowotny said, according to the news agency. "The intention is to get again control of the unorderly markets and I think this is a goal that has been achieved remarkably in an effective way, so I think it makes sense to stay on the way we have started."

The single European currency's sharp declines versus the greenback earlier in the day came as relief over a massive EU rescue plan to combat the euro zone debt crisis faded.

Meanwhile, the euro slumped versus the yen on Tuesday, with EUR/JPY dropping 1% to reach 118.09.

Also Tuesday, official data showed that U.S. consumer confidence rose slightly slower than expected in May, and that inventories at U.S. wholesalers rose for a third month in March.

Forex - Dollar up vs. most rivals as ECB defends bond buying

Forex Pros – The U.S. dollar was up against most other major currencies on Tuesday, as a senior European Central Bank official said the ECB's move to buy government bonds had stabilized frenetic markets.

The greenback was up against the euro, with EUR/USD slumping 0.75% to hit 1.2692 after Reuters quoted Ewald Nowotny, one of the ECB's Governing Council members, as making the comments in an interview.

"The way how it is moving now it's quite positive," Nowotny said, according to the news agency. "The intention is to get again control of the unorderly markets and I think this is a goal that has been achieved remarkably in an effective way, so I think it makes sense to stay on the way we have started."

The remarks came after investors questioned the wisdom of solving the region's debt crisis by taking on more debt, as part of a massive EU bailout, amid doubts whether Greece will be able to carry out the harsh austerity steps needed to restructure its public finances.

Meanwhile, the dollar rose slightly versus sterling and the Swiss franc, with GBP/USD slipping 0.09% to hit 1.4833 and USD/CHF gaining 0.04% to hit 1.1104. The greenback was also up against its Australian and New Zealand counterparts: AUD/USD shed 0.67% to hit 0.8968 and NZD/USD slid 0.44% to reach 0.7194.

But the greenback was down against the yen and the loonie, with USD/JPY dropping 0.53% to reach 92.8 and USD/CAD sliding 0.15% to hit 1.0217.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.39%.

Also Tuesday, official data showed that U.S. consumer confidence rose slightly slower than expected in May, and that inventories at U.S. wholesalers rose for a third month in March.

EU Lending Package Boosts Australian Dollar

The Australian dollar rose today against its U.S. counterpart and some other majors after the European policy makers announced their plans to spend almost $1 trillion on the debt purchases to aid the debt-laden European countries, resulting in the increasing attractiveness of the riskier assets.

Australia attracts investors with its high benchmark interest rates, which are 4.5 percent, compared with the U.S. rates of 0–0.25, though the moves on the currency market may curb the profits. The yield on the 10-year benchmark notes increased by 0.10 percentage point to 5.57 percent.

The analysts say that the news about the loan package are very good for higher-yielding assets, such as the Australian dollar, the Asian currencies and the commodity currencies in general. The Aussie is expected to rise to about $0.9275.

AUD/USD rose today to about 0.9024 as of 10:19 GMT after it opened at 0.8989. EUR/AUD dropped to 1.4162 from its opening price of 1.4366. AUD/JPY traded at about 84.24.

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Dollar Rises Against Euro as Debt Concerns Return

The U.S. dollar advanced today against the euro, resuming its previous trend after retreating against the common European currency on announcement of the loan package by the EU governments, which failed to alleviate the concern about the future of the European economy.

The worries remain as the trouble in Europe seemed to be too deeply ingrained to be resolved by such measures as lending to the indebted countries and buying debts, in the opinion of most economists. The analysts say that it won’t be surprise if dollar would reach as high as $1.25 per euro.

EUR/USD traded near 1.2693 as of 10:44 GMT today after it opened at 1.2784.

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Aussie Weaken by Doubts About EU Loan Package

The Australian dollar fell against its U.S. counterpart, erasing its yesterday’s gains, and versus other most-traded currencies on the concerns that the loan package won’t resolve the fiscal crisis in the European Union.

The pessimistic outlook for the European economy makes investors to look for safety and drives away from the riskier currencies, such as the Australian dollar. The growth of the industrial output in China was lesser than expected, also weakening Aussie, because China is the biggest trading partner of Australia.

Despite the current difficulties for the Australian currency, some positive data appeared too. The nation’s budget is forecasted to return to surplus in 2012–13, earlier than in the previous estimates. Will the favorable economic data be followed by the currency’s appreciation we shall see.

AUD/USD traded at 0.8950 as of 21:07 GMT today down from the opening price of 0.9026. AUD/JPY fell to 82.96 from the opening level of 84.20.

If you want to comment on the Australian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

Earlier News About the Australian Dollar: