Fighting in Libya became deadly as protestors battle to keep leader
Gaddafi in power. Reports from the Suez Canal also said that two
Iranian ships entered the canal and heading towards Syria. This
political uncertainty pushed risk aversion higher weighing on the
euro. Against the greenback, the euro plummeted as low as 1.3549 from
1.3638
The US dollar appears firmer today supported by investors' appetite
for safer assets. Focus now turns to the US Consumer Confidence and
Manufacturing Index released later today.
Against the Japanese Yen, the dollar rallied after rating agency
Temperamental's changed Japan's sovereign rating to negative from
stable. The dollar climbed as high as 83.42 yen from 82.83.
The Australian dollar fell on Tuesday as unrest in the oil-producing
Libya intensified. Low risk appetite place the Aussie under difficulty
and pushed it as low as 1.0005 from 1.0082 versus the dollar.
Aussie's neighbor, the Kiwi, dropped nearly 2 percent after a deadly
earthquake hit the country. Discussion say that New Zealand's central
bank may lower the interest rates in order to boost confidence. The
Kiwi fell as low as 0.7487 from 0.7639 against the dollar.
Oil prices surged on Tuesday hitting confirmation high levels as Libya
is one of the largest producers of oil and tensions in the region may
hurt supply of oil. Oil prices jumped as high as 98.15 dollars a
barrel on Tuesday from 96.05.
*Currency to watch out for: EURUSD & USDJPY*
The EURUSD pivot point is at 1.3625 with a preference to enter into
Small positions at 1.3615
The USDJPY pivot point is at 83.00 with a preference to enter Long
positions at 83.05
*Today's calendar and market movers:*
Canada Retail Sales in December is forecasted to gain 0.7%
US Consumer Confidence in February is forecasted to rise to 63.0
US Manufacturing Index in February is forecasted to fall to 17
US S&P/Case-Shiller House Price Indices in December is forecasted to
fall 2.1%
*Equity Markets:*
The European bourses are negative with the FTSE trading down -1.12%,
the DAX trading down -1.41% and the CAC down -1.44%. The NIKKEI and
the HSI at the time of writing are trading down -1.78% and down -1.92%
respectively. The US market was closed on Monday for the President's
Day holiday
Source: ActionForex.Com
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