FRIDAY’S bumper US non farm payrolls pushed US dollar-yen to fresh highs for the year but the dollar failed to sustain this strength in post-Easter trade. A raft of economic data is coming out of Japan later this week, including machine orders for February and if the economic backdrop is looking strong then this could support the yen. The current IG Index price is ¥93.93-¥93.96
The euro came under more pressure against the dollar yesterday after yields on Greek government debt soared. Continued failed attempts by the euro to gain ground against the dollar emphasize that the downward trend is still in tact for the euro and could continue. Capital Spreads quotes euro-US dollar at $1.3371-$1.3371.
Sterling has undergone a recovery since the lows of last month, but that has had more to do with the problems in the Eurozone than any renewed optimism in the fortunes of the UK. Sterling will be extremely susceptible to the varying whims of the opinion polls over the next few weeks, but from a technical perspective the pound could well continue to gain against the euro. Last week euro-sterling broke below the 200-day moving average and could well test the lows of £0.8660 reached in February in the coming weeks. Traders should sell any euro-sterling rallies back towards £0.8870-£0.8875, and target a high of £0.8660. CMC Markets’ euro-sterling spread is currently £0.8789-£0.8785.
As mentioned in the Forex Flash, the Canadian dollar traded at paity with the US dollar yesterday, and was worth more than the dollar at times during the trading day, the first time this has happened since July 2008. The fall in US dollar-Canadian dollar was fuelled by a boost in the oil price and expectations that Canada will follow Australia and raise interest rates later this year after a strong jobs report released last week. IG Index offers a spread of C$1.0005-C$1.0007.