CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
Established in 1974
Clients across 156 countries
15,000 markets worldwide

US dollar weakness offers momentary relief

The template of US dollar strength against most of the global currencies has been halted, at least in the short-term.

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
Dollar and euro currency
Source: Bloomberg

EUR/USD eyes $1.22

The downward trajectory of EUR/USD has abated over the last 48 hours, with this morning seeing German trade balance figures jump higher. This good news has been somewhat countered by France, once again disappointing, by posting a worse-than-expected trade balance and government budget balance.

As my colleague David Madden pointed out yesterday, EUR/USD has been eyeing up an attack on the $1.22 level and this has, for the time being, been put on hold. Today’s 35 point move higher might be welcomed but much of a move above $1.24 or approaching the 50-day moving average looks optimistic.

EUR/USD chart

GBP/USD still stuck in tight range

The weakness in the US dollar has helped see 120 points added to GBP/USD and once again enter the $1.56-$1.58 range that it has spent much of the last two months trading in.

This morning has seen currency traders treading water as they waited for the UK to publish both manufacturing and industrial production levels, but with both coming in considerably worse than expected the pressure will come back on sooner rather than later.

The perception that the pace of recovery in the US is outpacing the UK has increased, with expectations that the enthusiasm-killing ‘considerable time’ comment will no longer be appearing in any of the Federal Reserve’s commentary. If this transpires, currency traders will no doubt jump to conclusions that change is imminent.  

GBP/USD chart

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.  Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. 

CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.