Daily Forex Market Analysis | 02 June 2010

Continuing market uncertainty and Euro declines helped support Gold prices as investors turn to the metal as an alternative safe haven investment. Gold levels were further supported by positive economic data from the U.S on the one hand and manufacturing concerns from China on the other. Chinese growth concerns are adding to the uncertainty regarding the global economic recovery, pushing investors to the metal as an alternative investment.

Summary

USD - USD Remains Strong as Euro-Zone Uncertainty Persists

EUR - EUR Recovers from a 4 year Low

JPY - JPY Declines as Prime Minister Resigns

Crude Oil - Crude Falls on Concerns Regarding Global Economic Recovery

Forex Market Trends – 02 June 2010

Economic News

USD

The Dollar advanced slightly against most of its rivals Tuesday, supported by solid U.S. economic data and while concerns over the Euro-zone sovereign debt crisis persist. The Institute for Supply Management report Tuesday came in at 59.7, from 60.4 in April. The result was better than the 58.7 expected by economists. A reading over 50 indicates growth.
The Dollar is currently at 91.63 Yen from 91.18 last night. The EUR/USD pair is currently trading around $1.2250, after dropping to a 4 year low of $1.2110 in European trading Tuesday.
The Bank of Canada raised its key interest rate from a record low yesterday, the first Group of Seven central bank to do so since July 2008. However, the Canadian Dollar fell following the news, as the bank indicated in the accompanying statement that caution is needed with any future rate increases. Late Tuesday, the U.S. Dollar was stronger, at C$1.0541 from C$1.0433 late Monday.

EUR

The EUR dropped to a 4 year low Tuesday on concerns that the Euro-Zone debt crisis could affect the global economic recovery. The EUR later recovered after the release of better than expected U.S economic data though the common currency still ended lower against the Dollar.
Late Tuesday, the EUR was at $1.2236 from $1.2304 late Monday; it dropped overnight as low as $1.2110, its lowest level since April 2006. The EUR is at 112.33 Yen. The U.K. Pound rose to $1.4730. The U.K Pound rose against the Dollar on development reports from Prudential PLC's planned $35.5 billion takeover of AIG's largest Asian life-insurance.

JPY