Euro Drops ahead of German Key Figures. Latest Currency Market Update

Yesterday the EUR closed trades at 1.4769 versus the USD, the weakest level for the last two weeks. On Tuesday the European currency was at 1.4802, a little bit lower from Monday 14-month high of 1.5064 per Dollar on Monday morning. The EUR/JPY was 135.88, lower from 137.08 on the currency market.

The European currency drop is described by concern on negative German unemployment data due to be released tomorrow. The reading is expected to be 8.3 percent in the month of October, a 0.1 percent drop from September figures. Also the separate researches show that commodity and stock market is likely to peak as recovery in the USA seems to be fragile.

Among today`s important events in economic calendar the major one is the German CPI figures likely to deliver worsening of consumer prices. The Euro will probably lower a little bit moving away from 1.500 level versus the USD.

Recovery Signals Boost Dollar Decline

The US currency ended up trades with a slide as the US economy showed first signals of recovery after the global recession. Today the US government is set to release its figures of GDP expected to decline at a slower pace in 2Q than in 1Q. Global corporate earning reports added to optimism. Participants of Forex market took advantage of the fresh optimism to choose higher-yielding currencies, such as the Euro and Aussie.

Yesterday Germany and the Euro-Zone issued better than expected reports on unemployment and consumer confidence bringing USD decline against EUR reaching 1.4128 level. The markets also witnessed the USD fall versus GBP as British consumer confidence showed optimistic results.

It is expected that today traders will go on trading with yesterday`s optimism. This behavior is expected to drive lower the USD index.

June 23 Latest Market Update

Late Monday morning the U.S. dollar is considerably higher after a new risk aversion, with the commodity currencies including the Australian and Canadian dollars and in particular are selling off dramatically as commodity prices fall.

The Australian dollar is trading 79.17 U.S. cents from 80.57 on Friday. The U.S. dollar is trading around C$1.1540 against its Canadian currency from C$1.1339 on Friday.
Traders are waiting for Federal Reserve's open market to announce tomorrow a new Federal Funds Rate. This fact brings uncertain mood among investors, which in turn is weighing on stocks and other riskier asset classes including commodities.

A report of Marc Chandler, chief currency strategist at Brown Brothers Harriman in New York, said the combination of the World Bank's forecast for a deeper recession this year than it anticipated as recently as March, together with some reports that China's commodity stockpiling is set to slow, has strengthened on industrial metal prices and has encouraged gaining profit in the so-called commodity currencies , such as the South African rand and Brazilian real.