ForexPros Daily News October 27, 2010
Forex – EUR/USD tumbles to 5-day low on Fed easing doubts
Forex Pros – The euro was down against the U.S. dollar on Wednesday, tumbling to a 5-day low after signs emerged that the second round of quantitative easing by the Federal Reserve may not be as large as anticipated.
EUR/USD hit 1.3772 during late Asian trade, the pair’s lowest since October 20; the pair subsequently consolidated at 1.3774, shedding 0.61%.
The pair was likely to find short-term support at 1.3697, the low of October 20 and resistance at 1.3981, Tuesday’s high.
Late Tuesday, a report in the Wall Street Journal said that the Fed is likely to unveil a program of U.S. Treasury bond purchases worth a few hundred billion dollars over several months. The report was contrary to rising market expectations of purchases in excess of USD 1 trillion.
The report said that the bank favored an approach that allowed them to adjust policy as the economic recovery unfolded, with the ability to make more purchases in the future if necessary.
The euro was also down against the pound, with EUR/GBP shedding 0.06% to hit 0.8741.
Later in the day, the U.S. was to publish data on durable goods orders and new home sales.
Forex – AUD/USD down on economic data
The Australian Dollar was lower against the U.S. Dollar on Wednesday after the release of Australian data on CPI.
AUD/USD was trading at 0.9744, down 1.11% at time of writing.
The pair was likely to find support at 0.9720, today’s low, and resistance at 0.9974, Monday’s high.
Earlier in the day, official data showed that Australian consumer price inflation rose less-than-expected to a seasonally adjusted 0.70% in the last quarter from 0.60% in the preceding quarter.
Analysts had expected CPI to rise 0.80% in the last quarter.
Meanwhile, the Australian Dollar was down against the Euro and the Japanese Yen, with EUR/AUD gaining 0.82% to hit 1.4182 and AUD/JPY falling 0.71% to hit 79.68.
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