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EURUSD Breaks 1.1400 For First Time In 1 Year

Today in our fundamental analysis:  The dollar continued to hover at eight-month lows against the other major currencies on Thursday, amid growing signs of tighter monetary policy from several major central banks around the world.

Fundamental Analysis

  • EUR/USD breaks 1.1400 for the first time in a year. The pair traded as high as 1.1435 after European Central Bank (ECB) President Draghi indicated that the threat of deflation has returned. Markets are also doubtful that the will Fed hike rates in September due to weak economic data and also delay by Senate on health care vote.
  • Gold Trades higher on weak US Dollar. Gold has recovered sharply after hitting a low of $1236 (6- week low) on account of a weak dollar. The yellow metal showed a minor recovery till $1255 but it is now trading again around $1244.
  • GBP/USD Climbs above 1.30 for first time in 5 weeks. The pair traded as high as 1.3005 before pulling back to 1.2960. Sterling added gains after the Bank of England (BOE) chief economist Andy Haldane said policymakers need to look seriously at raising interest rates. The hawkish remarks came after Governor Mark Carney said on Wednesday that the central bank is likely to need to raise interest rates as the British economy comes closer to operating at full capacity.
  • Global stock markets were mixed as investors continued to digest hawkish comments from key central bank officials in Europe and announcement of major buybacks plans for some of the biggest U.S. banks.
  • Oil prices extended gains into a sixth session to hit the strongest level in two weeks after U.S. government data revealed the biggest weekly decline in domestic crude production in almost a year.

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