Strong Chinese Data Stresses Dollar
The EURUSD spiked higher during the night climbing to 1.4540 before retracting to its present 1.4520 (see hourly chart). The dollar has been under pressure since the release of the disappointing Non-Farm Payroll figure last Friday that reported further US job losses of 85k.
The dollar’s problems have also been amplified by US officials claiming in the last few hours that US interest rates will remain low for quite some time. In addition, strong Chinese export data released this morning has boosted risk appetite to the detriment of the safe-haven greenback.
The EURO has had a good 24 hours but its gains against the dollar, in particular, could be limited. A major UK newspaper announced today that Portugal is now also facing serious threats to its credit ratings. This development places the Euro-zone under further fiscal distress as it attempts to cope with the sovereign debt of a number of members especially Greece.
Still, if the EURUSD can sustain a serious break of its important 1.4570 level, then investors may start thinking about reducing their long USD exposure. The US earnings season also starts this week which will be the next big test of the Dollar.
