Forex Market Update: U.S. Dollar Advances Across the Board as Risk Appetite Wanes

EUR/USD consolidated around 1.4100 much of the Asian session, before slumping to session lows of 1.4069, with the stronger dollar led by the commodity block with both AUD and CAD coming under pressure before EUR and GBP began to lose ground. On AUD, EUR/AUD buying and AUD/NZD selling weighed on the currency. Also seen bearish for AUD and CAD were the comments from the chairman of the China Banking Regulatory Commission, asking whether positive signs in the economy are for real, noting that the incongruity between the Chinese stock market gains while corporate profits are falling. Despite EUR gains, the economic outlook for the Eurozone remains grim with German Chancellor Merkel stating that that she does not expect a speedy economic recovery and that the crisis is not over with a long and difficult road ahead. Reports from both the ECB and IFW released on Thursday do not anticipate a recovery until mid-2010. And while the IMF raised their global growth forecast on Thursday, the World Bank lowered their estimate to -3% from -1.75% for this year. Offers on EUR/USD are reported at 1.4180 and 1.4200 and as high as 1.4260 with buyers reported at 1.4050, 1.400 and 1.3900.