There is no real economic data out today so it may be fairly quiet on the currency front. The Dollar is showing no signs of weakening as it continues to strengthen against both Sterling and the Euro. This could cause Sterling to rise against the Euro and we could see levels in the mid 1.16’s. The levels at the moment are very good for selling Dollars and an order at 1.3250 selling Dollars against Euros would be likely to hit over the course of today.
Overnight there was some news out of Japan with their CPI falling for the first time in four months as fears over deflation begin to surface. Their exports are struggling due to the strength of their currency and the recent floods in Thailand which have hurt their manufacturing output. We could see the Bank of Japan intervene soon to weaken their currency and try to boost their slowing economy.
It is “Black Friday” in America today with most people taking the day off to make the most of the deals and discounts on offer. Shops will be open all day and the financial results of the day usually demonstrate how the US economy is doing. They are expected to be good and this may provide a small boost to the US economy. In the UK the government is trying to address the problem of youth unemployment with a new £1 billion scheme which will try to create 160,000 new jobs by subsidising part of their wages. Questions need to be asked where the money is coming from to pay for this scheme.
Towards the end of the day we could see some movement with the usual end of week profit taking. This may result in a short term rise in EUR/USD and GBP/USD as positions are removed from the market.
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