The European Single Currency suffered
one of its biggest falls since the start of the year yesterday, coming down
over 1.5% against the US dollar. The last collapse of this magnitude was on
March 18th, when it came off over 2.0% against the US unit.
To explain the move, many commentators
are pointing to the comments made by a member of the board of governors of the
Federal Reserve, Jerome Powell, at a live discussion yesterday morning New York
time, when he intimated that the first Fed interest rate rise could conceivably
come as early as the September Federal Open Market Committee (FOMC) meeting,
with the possibility of another in December, but the fact of the matter is that
the move down had well and truly commenced in the Asian session, before governor
Powell made his remarks, although they did accelerate the drop.
Fall
was in spite of Greek optimism
And the move was in spite of optimism
on the Greek matter, which most observers now believe will be resolved in the
fullness of time (the only question is really how messy, or otherwise, the
resolution will be). It was also in spite of yet another disappointing Durable
Goods report from the US Census Bureau, which should, in theory, have depressed
the US dollar (and it did, for about ten minutes), although New Home Sales stateside
showed an improvement.
Later today sees the release of US
Gross Domestic Product figures, always a closely watched event by the Forex
marketplace.
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