US dollar gains versus euro and rouble, but falls against yen
The US dollar gained versus the euro, but fell against the yen in the Asian trading session on Monday. At 6:39 AM London time, the EUR/USD trading rate was at $1.2294. Against the yen, the dollar was trading 0.11 yen lower from Friday last week, at 78.35 yen. Russia’s rouble was weak against the greenback, trading at 32.17 roubles to the US dollar. The rouble may hit the biggest loss against the US dollar in a week as trading continues on Monday.
Demand for the US dollar was limited as investors are waiting to know about the outcome of the Federal Reserve’s two-day meeting which starts on Monday. There are chances that monetary easing will be announced at the end of the meeting, in order to provide a boost to the US economy. However, the US unemployment rate, which will also be announced soon, may dampen any positivity created by a Federal Reserve announcement.
Euro falls against most currency peers
The euro fell versus most of its currency counterparts in the Asian trading session on Monday. There are worries that unemployment data to be released on Tuesday may worsen sentiment. The European Central Bank will be looking to take effective policy measures to curb the negativity.
At 6:39 AM in London, the euro was trading at $1.2294. Against the yen, the euro was trading at 96.32 yen, a drop of 0.4%. Even Russia’s rouble was higher by 0.3% against the euro, and was trading at 39.5108 roubles per euro.
Experts feel that the euro will continue to struggle, and monetary policy will play a major role if Europe’s debt crisis is to be resolved. So far, the euro has been one of the worst performers in the currency market for July 2012.
Yen continues to rise against key currency peers
In Monday’s Asian trading session, the yen continued its recent trend of gaining versus most of its peers. At 6:39 AM London time, the EUR/JPY rate was at 96.32 yen. The USD/JPY rate was at 78.35 yen, down from 78.46 yen at the close of trading on Friday.
The demand for the yen is high as investors are looking at highly liquid currencies such as the Japanese currency during troubled economic times. The yen will take its cues from the developments in Europe and the US, as domestic policy announcements are not expected. Japanese companies will also be watching the yen’s exchange rate, as a very high exchange rate is detrimental for them.
Oil prices rise on speculation that policymakers will act to boost growth
Crude oil was trading at high levels on Monday. This was amid speculation that US and European lawmakers will take measures to boost growth. The tensions in the Middle East also had traders speculating whether a disruption in supply is on the cards.
Crude oil for September 2012 delivery at the NYMEX was trading at $90.25 per barrel, up by 12 cents at 3:04 PM Singapore time. In London’s ICE Futures Europe Exchange, Brent crude oil for September 2012 settlement was trading at $106.20 per barrel.
Experts feel that oil prices may continue to rise next week, if the current sentiment holds good.
This article was prepared by Forex Minute
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