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ForexPros Daily News October 20, 2010

Discussion in 'Forex Daily News & Outlook' started by forexpros2, Oct 20, 2010.

  1. forexpros2

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    ForexPros Daily News October 20, 2010


    Forex -USD/JPY moves lower, re-approaching 15-year low

    Forex Pros – The U.S. dollar was down against the yen on Wednesday, re-approaching a 15-year low as market focus returned to the prospect of further monetary easing by the Federal Reserve.

    USD/JPY hit 81.20 during European morning trade, a daily low; the pair subsequently consolidated at 81.26, shedding 0.39%.

    The pair was likely to find support at 80.87, last Friday’s low and a 15-year low and resistance at 82.55, the high of October 8.

    Earlier in the day, Bank of Japan deputy governor Kiyohiko Nishimura said the strong yen could erode corporate sentiment and lower consumer prices, exacerbating deflation and restricting economic growth.

    “The fact that the recent appreciation of the yen is deteriorating business sentiment” is a “big factor in putting downward pressure on economic activity,” Nishimura said. He added that the bank will continue to pursue “strong” monetary policy measures and stands ready to take appropriate monetary action.

    Meanwhile, the yen was down against the euro, with EUR/JPY gaining 0.17% to hit 112.17.

    Later in the day, the Federal Reserve was to release its Beige Book, a summary of the data the bank examines before setting the benchmark interest rate.

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    Forex - EUR/USD rebounds from 11-day low as focus returns to Fed

    Forex Pros – The euro was up against the U.S. dollar on Wednesday, rebounding from an 11-day low as focus turned back onto the prospect of further monetary easing by the Federal Reserve.

    EUR/USD hit 1.3801 during late Asian trade, a daily high; the pair subsequently consolidated at 1.3792, gaining 0.46%.

    The pair was likely to find support at 1.3636, the low of October 5 and resistance at 1.4155, last Friday’s high and a 10-month high.

    On Tuesday, three regional Fed presidents reinforced that the central bank will begin a second round of asset purchases with two saying asset purchases must be big enough to aid the economy.

    Chicago Fed president Charles Evans said the bank would need to buy securities on a large scale several times in order to temporarily to raise inflation. Meanwhile, Atlanta Fed president Denis Lockhart said that a rate of USD 100 billion of purchases per month is “in the range of numbers one might consider.”

    The euro was also up against the pound, with EUR/GBP gaining 0.38% to hit 0.8775.

    Later in the day, the Federal Reserve was to release its Beige Book, a summary of the data the bank examines before setting the benchmark interest rate.

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