US dollar strengthens against euro and yen
The greenback strengthened against the euro and yen. In fact, it reached a 2 year high against the euro in the American trading session on Wednesday. Against the Australian dollar and New Zealand dollar, though, it registered a fall.
The EUR/USD rate was at USD 1.2227 at 2:45 PM New York time. The US dollar fell by 0.6% against the Australian dollar and was at 1.0261. The New Zealand dollar rose by 0.6% and was trading at 0.7986 US dollars. The US dollar also registered a gain of 0.3% against the Japanese yen, and the USD/JPY rate was at 79.63.
The US dollar gained against the yen and euro, as the minutes of the Federal Reserve meeting in June indicated that a decision on economic stimulus is still not certain. This prompted greater demand for the safe haven currency of the US.
Euro falls versus the US dollar
The euro depreciated against the US dollar, but gained versus the Japanese in the American trading session Wednesday. The euro is expected to fall further against the US dollar, as analysts feel that the demand for the US dollar will increase due to its safe haven status.
At 2:45 PM New York time, the euro was trading at 1.2227 US dollars. The EUR/JPY trading rate was at 97.58. The euro was trading at 68.0084 against the Indian rupee, and the EUR/GBP rate was at 0.7872. Despite Spain’s austerity measures, which were announced on Wednesday, the euro still seems to be extremely bearish. Foreign exchange traders also feel that the funds in the European Stability Mechanism will be inadequate to stabilise Europe’s troubled banks.
Yen falls versus most currency counterparts
The currency of Japan, the yen, fell against most of its currency counterparts in Wednesday’s Asian trading session. This was amidst the Bank of Japan meeting regarding possible economic stimulus, and a decrease in demand for safe haven currencies. The Bank of Japan also raised its economic assessment of Japan’s nine regions. This was the first time this has been done since October 2009.
At 1.00 PM New York time, the USD/JPY trading rate was 79.63. The EUR/JPY trading rate was at 97.58, a decrease of 0.3%. Foreign exchange experts will be awaiting the results of the Bank of Japan meeting on Thursday. Any announcement by the Bank of Japan is likely to affect the yen’s trading rate.
Oil prices rises on supply news from the US
Crude oil prices rose on the news that US crude oil supplies have dropped, and that refineries were operating at 5 year highs. In Wednesday’s American trading session, it was reported that crude oil inventories had fallen by 4.7 million barrels, much more than that was expected. Oil refineries in the US were operating at 92.7% of capacity.
At 1:08 PM New York time, crude oil at the NYMEX inched higher to reach prices of $85.98 per barrel. Brent crude registered a gain of 1.9% and was trading at $99.82 per barrel.
Another reason for the rise in oil prices was the fact that automobile sales in China were better than expectations. This would mean an increased demand for oil.
This article was prepared by Forex Minute
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