FX traders have been selling the dollar on the back of speculation there will be QE3 in the US to bolster growth in the economy. The euro has moved to its highest level since the turn of the month, and it has been helped on by expectation that EU finance ministers will agree to reinforce the Eurozone debt-crisis firewall this week. Euro-dollar has broken through the $1.3294/303 resistance range, which could signal potential to move higher to $1.3489. Capital Spreads quotes 1.3333-1.3334 for euro-dollar.
With cable testing the $1.600 level, as a result of weakness in the dollar on hints of further US easing, a move above this could see a re-target of $1.6160, last seen in late October. A failure to break and close above this level could see the pair slide back to around the $1.5800 level, which has acted as decent support recently. CMC Markets offers a spread of $1.59691-$1.59702 for sterling-dollar.
Dollar-yen might have faltered at the ¥83.80 level, but for now the uptrend remains intact. Of course, we now have the latest Bernanke bounce fuelling market sentiment, which could start to take more of a bite out of the US dollar’s recent run higher. Bernanke’s broadly cautious comments about the US employment picture have raised hopes once again that the world’s most powerful central bank is mulling intervention again. If this speculation intensifies, there is still the possibility that the current dollar-yen uptrend could fizzle out. IG Index’s price on dollar-yen is ¥82.82-¥82.83.
Gold can be a misunderstood asset, but it loves liquidity and after Helicopter Ben touted the potential for more QE, the yellow metal is benefiting from dollar weakness. Can it have another go at $1,800? Forex.com is currently offering $1,693.15-$1,693.60 for spot gold.