14-Month Low for the Dollar

The USD reached its 14-month low versus the EUR as investors choose higher yielding assets for trading abandoning dollars. On Tuesday the EUR/USD reached the top of $1.4828 and ended trades at $1.4786. The last time when these results were seen was August 2008. Gold seems to be the most attractive asset for trading.
The investors looking for high yield ignored pessimistic Euro-Zone economic data to ensure the better-returning Euro to $1.50. It seems that this level will be attained shortly.

The greenback may drop even more today before the government reports its forecast to deliver consumer prices rose last month. This report is one the most important economic events for today.

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Bullish Stock Market Sentiment Brings Dollar Decline

The US Dollar ended up yesterday`s trades at the lowest level for this year against the Euro. This decline was caused by decline in US equities and pessimistic services sector figures. The greenback also slid 0.2 percent versus the JPY reaching the level of 95.02 from Tuesday`s mark of 95.25.

The broad decline of the Dollar is spurred by rally of high yielding assets such as shares and commodities. As economists and experts of technical analysis stated the Dollar's inverse relationship with trader appetite for risky assets has reasserted itself in last weeks. The USD has also lost its position as equities started a strong global rally and investors rushed into assets perceived as higher yielding ones.

Optimistic figures from China and the US boosted investors to sell Dollars choosing for trade risky assets making it complicated for the Dollar to rally a lot.

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.

Dollar Continues Strengthening

The US currency continues gaining versus its main counterparts. Yesterday it came close to its 2 week high against the Euro. It also rose against the Pound and Yen.

The reason of such appreciation is a better than expected Core Durable Goods Orders monthly report accompanied by China`s statements that it will keep on maintaining loose monetary policy. It seems that investors were impressed by the 1.1% rise in the Core Orders during June. The difference between the two reports is that the Core report measures the change in the total value of new purchases orders placed with manufacturers for durable goods, excluding transportation items. Orders for aircraft are known to be very volatile, and thus have the potential to distort the underlying trend.

Traders usually tend to pay more importance to the Core report as purchases orders placed with manufacturers for durable goods such as orders for aircraft are known to be very volatile. This report shows signs of positive growth, for the third straight month making investors believe that the global recession is coming to the end.

Among today`s news in economic calendar the main release from the U.S economy looks to be the weekly Unemployment Claims report at 12:30 GMT. Currently, while all the major economic indicators of the U.S economy are showing signs of recovery, it is only the job sector which goes on producing negative results.

Trichet Speech Announcement

On Monday, June 22nd at 8:00 AM EST, Jean Claude Trichet, European Central Bank Chief, is expected to talk about the current state of Europe economy recovery after the world financial crisis. At the Hotel Ritz in Madrid he will be speaking before a conference organized by the New Economy Forum and the Wall Street Journal.

The European currency is controlled by the ECB's Chief more than by any other single financial official. Thus his today`s speech may may effect the Euro position. As some market analysts expect, Trichet's speech will contain more positive words about the future of European economy and it may produce depressing influence on the Greenback. The EUR/USD remains at 1.4000 level.

Jean Claude Trichet is famous for his sentiment of inflation and broad hints that are closely analyzed being quickly acted upon by small and large participants in the currency markets.

Porsche in Search of New Investors

Now Porsche is trying to improve its balance sheet by getting an outside investor. This investor appears to Qatar. At this point, the Porsche and Piech owner family controls 100% of the company's voting shares. This transaction is expected to encourage Europe`s currency market investors.

Additionally, Porsche has asked for a €1.75 billion loan from KfW which is a state-controlled bank for the remainder of a €12.5 billion credit facility, which Porsche anticipated to secure as credit markets turned downside due to financial market woes.

The outcome of the talks with Qatar and KfW are agreed to have a significant impact on Porsche's position in negotiations with Volkswagen over fusion into an integrated company. Both Porsche and Volkswagen keep silence about the current status and prospects of the merger talks since news broke that Porsche might clinch a deal with Qatar.

18.06 Forex Trading Results

According to The Philadelphia Federal Reserve Bank, its business activity index improved to negative 2.2 in June from minus 22.6 in May. This fact has been recorded as the highest reading since September 2008.

That was considerably above economists' forecasts of minus 17, based on the average predictions among U.S. economists. The manufacturing survey also showed the index's measure of future activity surged to its highest level since September 2003. Philadelphia Fed Index is an indicator of overall economic situation in Pennsylvania, Delaware, New Jersey. If it accounts for economy development if its level is above zero, if not, it indicates recession.

DJIA rose 37.19 (+0.44%) and remains at the level 8534.37. Nasdaq index slid 2.43 points (-0.13%) and keeps at the level 1805.63. Quite unexpected information arguing business activity rise caused a new wave of risk position demand.

Euro declined to an intraday low against the dollar and other currencies in evening trading Thursday as U.S. stocks pared earlier gains.

No Impact on Currency Market Yet

The dollar cannot extend its Monday level in overnight trading also worked against the currency The investors who were reassured by comments reinforcing the dollar's status on Monday concentrated on the issue as the summit meeting of Brazil, Russia, India and China unfolded.

According to late morning press reports, the leaders of those BRIC economies called for a "more diversified" global currency system. Earlier, a Kremlin economic aide had said that Russian President Dmitry Medvedev "will raise the reserve currency issue," prompting the euro to climb against the dollar. The euro pushed briefly to a session high at $1.3934 after U.S. economic releases but the data did not make a marked impact on currency markets.

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