The Land of Rising Inflation!
Yesterday the U.S Commerce Department said that the U.S economy grew by 0.6 percent unchanged from the previous estimate in the final reading for the fourth quarter of 2007, while early this morning Japan reported that inflation rose to the highest in a decade!
Financial markets though remain skeptical over the future of both economies, the U.S and Japan, as economists believe they both entered a phase of recession, and we’re talking about the 1st and 2nd largest economies respectively!
The Euro seems to have settled above the $1.57 against the U.S Dollar, as the pair has been trading within limited ranges consolidating slightly below the $1.58 level in order to gather more momentum to set new record highs against the deteriorating Dollar. The pair recorded a high of 1.5811 early this morning to decline afterwards and set a low of 1.5764, good demand is seen around the 1.5720s levels, while minor resistance is seen at 1.5820 ahead of the stronger one at 1.5860s.
The Pound unlike the Euro declined against the Dollar last night as the pair dropped from the resistance at 2.0190 to reach near the psychological barrier near the $2 barrier, the pair recorded today a low of 2.0034 before rising to set a high of 2.0089, today the U.K will release their final GDP estimate for the last three months of 2007, the economy probably grew by an annualized 2.9 percent unchanged from the previous estimate.
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Inflation rose in the land of the rising sun at the fastest pace in a decade, while their unemployment rate rose unexpectedly! Many believe the Japanese economy will follow the U.S economy on their path to recession, while rising inflation could make the situation a lot more difficult for the BOJ to deal with, investors believe the BOJ will be forced into cutting their interest rates by 25 basis points this year, while official releases from the BOJ indicates the BOJ might actually hike their interest rates!
The USD/JPY pair seems to have settled within the 99 levels, as the pair didn’t successfully breach the 100 levels or the 98! The pair recorded today a high of 99.88 and a low of 99.28.
The Euro inclined against the Yen near the critical resistance level at 157.75 yet couldn’t breach it as the pair had set its highest for the day so far at 157.70, while the Pound couldn’t hold on to yesterday’s gains as the pair dropped back to 199 levels setting its highest so far at 200.46, meanwhile the Euro went back to its winning ways against the Pound as the pair settled well above the 0.78 levels recording ahigh of 0.7878 and a low of 0.7858.
Crown Forex
disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.
