Alan’s Forex Blog

Fundamental Sterling touched 3-month highs versus the dollar on Monday after UK data showed manufacturers costs rising at the fastest rate since records began, while manufacturing output rose for the first time since October. The figures supported views that the Bank of England would not hurry to cut interest rates further from the current 5.25 percent after it stood pat on borrowing costs last week. Technical The Sterling may extend its rally to as high as 2.0580, based on charts that predict

The dollar regained some ground against the euro on speculation investor sentiment is weakening in Germany, ECB President Trichet said in his speech yesterday. “Trichet is likely to continue making such comments, and that will put a cap on the euro,” said Kenta Inoue, economist and currency analyst in Tokyo at Mitsubishi UFJ Securities, a unit of Japan’s largest publicly traded bank. “Negative economic data will also weigh on the euro.” Royal Bank of Scotland expects the dollar to fall

The dollar fell for a fifth day in a row as the European Central Bank left interest rates at 4% to tackle inflation. Speculation among traders spread as they increased bets the Federal Reserve will lower interest rates by 75 basis points. “The dollar’s weakness is extraordinary,” Stephen Jen, head of currency research in London at Morgan Stanley, the second-largest U.S. securities firm, wrote in a research note. “The recent sell-off in the dollar is both definitive and justified by economic

The Euro surged to a record high against the dollar as the market absorbed the interest rate differential. “The yield story is negative for the dollar,” said Tomoko Fujii, head of Japan economics and strategy at Bank of America Corp. in Tokyo, the second-largest U.S. bank. “The U.S. interest-rate disadvantage over Europe is widening, and its advantage is diminishing over Japan.” The dollar fell for a fourth day in a row as the European Central Bank will probably leave interest rates at 4%

Euro dollar retreated from record highs of $1.5275 yesterday over ECB President Trichet’s concerns on greenback weakness. Euro gains were threatening to dampen exports just as the U.S. slowdown dims the region’s growth outlook. The euro’s advance complicates the work of the European Central Bank, which meets on interest rates this week. European finance officials said they are “increasingly concerned” the euro’s advance to a record high against the dollar risks deepening an economic

Euro dollar hit a record high over $1.5275 yesterday, threatening to dampen exports just as the U.S. slowdown dims the region’s growth outlook. The euro’s advance complicates the work of the European Central Bank, which meets on interest rates this week. European finance officials said they are “increasingly concerned” the euro’s advance to a record against the dollar risks deepening an economic slowdown, stepping up their rhetoric in an effort to stem the currency’s gains. Europe’s economic

Soft U.S. economic reports in the past week and comments by Federal Reserve Chairman Ben Bernanke highlighted the central bank’s concerns with growth and boosted investors’ expectations for further interest rate cuts. The U.S. dollar will likely extend its string of record lows against the euro in the week ahead with the slew of economic data on deck expected to keep investors focused on the possibility of a U.S. recession. The negative sentiment this week triggered a sell-off in the

Fundamental Consumer prices in the 15 countries using the euro rose 3.2 percent year-on-year last month, the same as in January and in line with market consensus. The bank’s fight against inflation is likely to be made easier by a strong euro, which hit record highs against the U.S. dollar at above $1.52 on Friday, and against the British pound - the two main trading currencies for the euro zone. Technical The currency’s rise against the dollar last week through so-called resistance levels