Forex Online Currency Analysis- This is EURO's Day | Increase in Unemployment in Britain | Bank of Japan’s Non-Move on Interest Rates

EUR

The Euro had an up day against the Dollar and Pound in advance of the US Federal Reserve’s decision on interest rates and in response to poor unemployment data coming out of Great Britain. In what could signal a change in sentiment the European equity markets have been doing better and the fortunes of the Euro have appeared to reverse.

At 5PM GMT, the Euro was trading above the psychological $1.30 mark against the USD at 1.3151; the Euro was also up strong against the British Pound to .9389 a 1.3% rise. The Euro also rose more than ½% to the Canadian Dollar to 1.6637, up ¼ to the Yen to 128.65 and up over1% to the Australian Dollar to 1.987.

GBP

The amount of unemployed in England rose at the fastest pace ever to a pre 1997 level of over 2 million. The numbers indicated that manufacturing jobs are being lost at alarming pace, sparking fears of an export slowdown. The British government’s assertion that a lower pound will support the export/manufacturing industry is being dismissed by investors that believe that only an increase in overseas demand can help the industry. Wednesday’s numbers have given credibility to this argument as Britons working in manufacturing, the staple of the export industry, have lost their jobs that at any other point since they began recording this data.

At 5:15 GMT, the Pound was down over 1/3% to the US Dollar to 1.3997, down ¼% tot the Aussie to 2.1153, down almost 2% to the Swiss Franc to 1.6283 and down 1% exactly to the Japanese Yen to 136.96.

JPY

Fallout from the Bank of Japan’s non-move on interest rates late Tuesday was muted as the aggressive moves of other Central Banks, notably the UK and Switzerland seemed to take precedence. The Yen slowed its decent, but still was weak in Wednesdays trading session even after the BOJ declared that they will be buying Japanese Government Bonds – which are now perceived to be a non-move considering that none of other major countries are buying Japanese Debt and the BOJ buying debt of their own country is considered to be a wash.

The Yen rose ¾% to the Dollar to 97.87, rose more than 1% to the Australian Dollar to 64.56, rose .8% to the New Zealand Dollar to 51.85 and fell ¾% to the Swiss Franc to 83.97 on top of its losses to the Euro and gains against the Pound mentioned above.

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US Fed's cautious optimism about the future helps Euro and Pound

The US Dollar fell against the Euro and Sterling yesterday as Forex traders and investors gained confidence which translated into an increased risk appetite as the US government moved to shore up the economy. Yesterday, the US Federal Reserve left interest rates at 0-.25% announcing that they will use all tools at their disposal to continue fighting the economic downturn. The Fed declared yesterday that the economy has indeed worsened since their last meeting in December, however that additional cuts to the key interest rates were unwarranted at this time.

In what was seen by the broker trading community as a signal of strength in action, the Fed said that they will continue to fight the economic woes at the source by supporting the functions of the financial industry by purchasing large quantities of mortgage backed securities, CDO’s and agency debt. This specific announcement pleased those trading and investing in the daily FX markets who fled the perceived safety net of the greenback for some risk and potentially greater reward. The Euro rose to slightly above $1.33 against the dollar while the Pound continued its climb trading above $1.43 – a more than 1% increase.

The Japanese Yen, another perceived safe haven currency also experienced losses today against the Euro and Pound as Forex investors digested the countries influx of cash late Tuesday to shore up businesses and financial companies. The move is widely seen as Japan’s way of curbing the recent strength of the Yen which is believed to hurt exports, the driving force of the Japanese Economy. The US Dollar rose one percent to just over 90 Yen, coming close to a key support level of 90.20. A move above this mark could signal a greater gain for the us currency against its Japanese counterpart. The Euro also made gains on the Yen, rising more than 1% to 119.02 as investors traded the relative safety of the Yen for the promise of greater returns from a Euro rebound.