Forex Investment and Currency Trading

EUR/USD
The euro slid to a one month low against the dollar on Monday as sharp falls in equities sent investors back to the perceived security of the US currency.  European equities tumbled 1.8 percent on caution before Bank of America earnings due later in the session. This also sent the euro to three week low against the yen, which typically gains during heightened risk aversion, and weighed hard on currencies seen as high risk, with sterling and the Australian dollar both falling sharply.
 
GBP/USD
Sterling fell broadly on Monday, pressured by the view the UK government will slash its economic forecast and underline the need to crank up borrowing when it announces its annual budget later in the week.  Data showing a slowing fall in asking prices for UK homes and a report from an influential business group that the nation has passed the worst of the recession did little to help the pound, which pulled further away from a three month high hit last week.
 
USD/CHF
The Swiss franc ticketed down against the euro and the dollar on Monday following a drop on Friday after Swiss National Bank chairman Jean-Pierre Roth said the SNB would intervene decisively if the franc rose.  In the near term, sentiment in the stock markets will be the key driver.  There are no hugely negative drivers for the time being, so the franc should consolidate at current levels in near term, unless there is some very bad corporate news.
 
AUD/USD
The Australian dollar fell on Monday as profit taking took the steam out of its recent spurt, pulling it from a six month peak against the euro. The Aussie was due for a bit of a correction after its run-up, which has carried over to the commodity and stock markets. The Aussie is 3.2 percent above its 30 day moving average.  The local dollar has zoomed up nearly 15 percent since the start of March to a six month peak.
 
USD/MXN
Mexico’s peso firmed on Friday, bonds gained and stocks rose after the central bank slashed interest rate in a bid to support the economy as it slides into recession. The peso firmed 0.13 percent at the central banks final reference.  Mexico’s central bank slashed its key interest rate by 75 basis points to 6.00 percent on Friday, its fourth cut in a row as it strives to pump life back into an economy that is sinking into recession due to the US downturn.
 
USD/JPY
The yen gained broadly as sharp falls in equities prompted investors to seek the perceived safety of the US and Japanese currencies.  European equities were down some 2.0 percent led by bank shares and commodities as crude and metal prices sank.  Much of the risk aversion is stemming from the Annual Report coming out of the UK later in the weak, which is expected to be bleak.
 
USD/BRL
Brazil’s economy has reacted well to recent government measures to increase liquidity in the banking system and to improve sales in key industrial sectors, according to Central Bank President Meirelles. Meirelles welcomed the optimism in financial markets the past weeks, but warned against excessive euphoria given the uncertainties in the global economy.
 
USD/CAD
The Loonie has weakened recently with falling equities markets and a selloff in the crude oil and metals prices.  The currency pair is testing resistance levels to the upside. Economic due later this week could be enough to push the currency pair further upward.
 
USD/KRW
The South Korean won ended local trade off lows against the dollar on Monday, after paring losses on dollar sales by exporters and on expectations for increased dollar supply from foreign investors in local stocks.  Seoul stock market’s benchmark index finished up around half a percent after fluctuating around Friday’s closing level as investors remained unsure  about the market’s direction after a recent rally.
 
USD/CNY
The yuan fell slightly against the dollar on the spot and offshore non deliverable forwards markets on Monday, pressured by a 1.5 percent rise in the US dollar Index since last Thursday. Offshore one year NDF’s rose today, hitting its highest levels since early April.  In China’s latest move to internationalize the yuan, Premier Wen Jiabao said on Saturday that Beijing would look at expanding its currency swap agreements, which are seen as a step toward eventually making the yuan more of a global reserve asset.
 
USD/INR
Major drivers of growth in India are witnessing moderation and various surveys of economic activity point towards less than optimistic sentiment for the economy in coming months, according to the central bank on Monday.  Forecasters from the Reserve Bank of India cut gross domestic product estimates for 2009/10 fiscal year to 5.7 percent from 6.0 percent.  The central bank reassured investors that a number of measures taken by the government would help tame the moderation in growth and revive consumption and investment demand.