Moody’s Downgrades Largely Ignored

US dollar gains in currency trading, though

Moody’s lastest downgrades initially sent a small shock through the currency market, but since then, many of the high beta currencies affected have pared losses. While the US dollar still remains higher against the euro and the pound, the European currencies have made progress today.

Moody’s downgraded sovereign debt in Spain, Portugal and Italy. Additionally, Moody’s shifted the outlook for Great Britain, France and Austria to negative. The news initially sent the euro and pound lower, but the currencies have since pared many of their losses.

Indeed, the forex market has decided to largely ignore the news as some mild optimism about a Greek debt deal emerges, and as the German ZEW comes in higher than expected. There is still some mild uncertainty in the markets, and the US dollar has the upper hand, but its gains have been limited. 

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Canadian Dollar Softens in Forex Trading

Loonie lower in currency trading

The Canadian dollar is softening today, heading a little bit lower as disappointment with US retail data affects high beta currencies. The US is one of Canada’s main trading partners, so less than great retail sales data in the US means trouble for Canada.

Even though the loonie softened quite a bit earlier in trading, it has since pared many of its losses. Canadian dollar is being somewhat supported with the help of large purchases of the loonie against Japanese yen, as well as bracing news out from the ZEW.

Additionally, oil prices are rising, and that should also help support the Canadian dollar somewhat. Loonie is still down against the greenback, but the gap has closed quite a bit since earlier. 

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US Dollar Slips against Yen in Forex Trading

Greenback falls after earlier gains

US dollar is slipping against the Japanese yen in forex trading, after gaining earlier. Japanese GDP news originally gave the US dollar a boost against the yen, but now the dollar has slipped.

Dollar is displaying general weakness today, heading lower as risk appetite rises around the world. The dollar index has fallen, and other currencies are in favor today — including the Japanese yen.

However, the situation could change quickly. Euro is struggling to maintain its gains against the UK pound, and there are still plenty of challenges remaining to the stability of the eurozone. 

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Euro Struggles to Maintain Gains Against Pound

Euro in forex trading

Euro is higher in forex trading today, gaining against the US dollar, yen and UK pound. However, the euro’s gains against the pound have been limited by better expectations for the sterling.

Euro is higher after the news that the Greek parliament accepted the terms of tighter Eurogroup requirements for a bailout. Even though Greece is experiencing unrest as a result, the euro is gaining.

However, euro’s gains against the pound have been limited by good economic news coming out of Britain. A retail industry group believes that the UK economy is poised for growth in 2012, and that further quantitative easing by the Bank of England will be unnecessary.

With this good news, and with Greece still in turmoil and concerns about other European countries high, it is little surprise that the euro is struggling — even though it is a higher against the UK pound for now.

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Will the US Dollar See a Recovery Next Week?

US dollar forex trading forecast

US dollar is higher today, thanks to the Greek drama continuing to play out. Greek leaders had presented an austerity plan to European leaders, but now Europgroup leaders are saying that they want even more austerity — and acceptance by Greece’s parliament.

The result is that the euro is plunging today. The US dollar is being sought as a safe haven, and could see recovery next week. Even though economic data in the US is mixed, the dollar is still high in demand.

Unemployment claims dropped this week, but that good news was countered by today’s release of lower consumer sentiment data. For now, it appears as though the US dollar forex trading forecast could be set for a recovery. If the Greek drama continues, forex traders will value the stability of the greenback.

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Euro Drops in Forex Trading

17-nation currency falters on incomplete Greek debt deal

Many thought that a Greek debt deal was finally being reached earlier this week. However, Eurogroup leaders are stipulating further measures to Greece, and the deal remains incomplete.

Indeed, the talks are on the verge of falling completely to pieces. As a result, the euro is dropping in forex trading. Euro is pulling back by quite a bit as concerns about what’s next dominate. Mixed economic data out of the US isn’t helping the risk situation.

For now, forex traders are interested in safe haven. Economic worries, and concerns about the future of the eurozone have them scrambling for the safety and stability of the US dollar, and that means, for now, that the euro has no place to go but down.

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Britain Expands Quantitative Easing By 50 Billion Pounds

Sterling higher in forex trading

Sterling is higher in forex trading today as Britain expands its quantitative easing program. The move has been widely expected, since the British economy remains stuck. The move is supposed to help prompt stimulus.

UK pound is also getting a boost from general risk appetite today. Normally, such easing would put the pound lower against the US dollar, but there is a great deal of optimism now that a Greek debt deal has been hammered out. High beta currencies are doing well today.

Pound is down against the euro, though. While it has had some success against the US dollar today, nearly all the currencies are making way for a jubilant euro. With a Greek deal done, the country won’t default, since it will have the help of ECB and IMF bailout funds. 

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US Jobless Claims Drop

US dollar index lower on better news

US dollar index is lower today, dropping as forex traders look for higher yields instead of safety. Greenback is not being used as a safe haven, since forex traders are interested in the high beta currencies.

US jobless claims dropped by 15,000, and lower unemployment persists. This is good news for the US economy, since it means that fewer people are losing their jobs. The good news has investors favoring currencies besides the US dollar.

Additionally, higher gold prices are exerting downward pressure on the greenback, sending it lower on the currency market. The good news is likely to keep the US dollar lower for quite some time. 

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ECB Expected to Remains on Hold while BOE Eases

Sterling could drop in forex trading

Tomorrow, both the ECB and the BOE are expected to make interest rate and monetary policy announcements. The ECB is expected to remain steady, and the BOE is expected to increase its asset purchase program.

Kathy Lien offers a look at a comparison between the economies of the eurozone and Great Britain. It becomes clear that in Britain things are still struggling along, and, as a result, policymakers at the BOE want to inject more cash into the situation.

The forex trading forecast for the sterling, then, is likely to point lower. Indeed, today the sterling remains down against the US dollar, even though the euro has largely recovered its earlier losses. This is likely to be a forecast of the future, in which more easing will send the sterling lower. 

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Euro Heads Higher in Forex Trading

Choppy trading on the currency market

Euro is heading higher in forex trading right now, recapturing some of the gains it lost earlier. It’s been a choppy day for the currency market. Earlier, the euro saw gains as optimism over Greece took hold. Then, those gains were pared as the optimism faded. Now, though, there is enough hope again to help the euro.

It’s been an interesting day as forex traders and others wait to see what kind of help the European Central Bank will offer Greece, and what measures Greek leaders will accept.

For now, euro is higher in forex trading. It has edge out the US dollar and is looking for some gains. However, a slight change in sentiment, or the smallest hint of bad news, could overset the gains and send the euro lower against the US dollar again. 

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