US dollar in demand sending EUR/USD below key 1.30 handle, outlook sees further EUR weakness

Details

Published on Thursday, 20 September 2012 12:48

Written by Rob Samson

The US dollar (Currency:USD) is benefiting from a generally negative tone on currency markets today.

 

The pound dollar exchange rate is 0.2 pct down on Wednesday night's closing level, GBP/USD is at 1.6190 at 13:42.

The euro dollar exchange rate is 0.77 pct lower at 1.2948.

"We’ve had another classic risk-off session overnight with the JPY taking top spot on the G-10 performance scale followed closely by the USD," says Shaun Osborne at TD Securities.

Soft European data extended the EUR’s move lower, but the sour tone for risk in the Asian session already had the EUR
under pressure.

"After breaking below the 1.30 handle, the EUR’s slide has been more whippy, but with little support before 1.2905/15, the prevailing trend should carry it a little further in the near term. We look to sell the EUR on rallies at the moment," says Osborne, commenting on the outlook for the euro dollar exchange rate.

From the UK we got the August retail sales release overnight, but an on-consensus print did not do much to distract the GBP from the broader risk-off theme initiated during the Asian session.

Looking ahead on the day, price action among the G-10 should continue to lump currencies into their respective risky or safe-haven buckets, and the direction for the broader risk sentiment should follow the tone of US data (see over) and potentially any themes from the string of Fed speakers.