The foreign exchange market is a global, worldwide decentralized over-the-counter financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies.
Learn About Foreign Exchange Market
The primary purpose of the foreign exchange is to assist international trade and investment, by allowing businesses to convert one currency to another currency. U.S. Dollar Trading (US) was able to gain after some strong economic data helped offset the usual risk on Dollar selling we see when stock market’s rally. June Private ADP Jobs Reports surged +157k vs. +68k forecast and bodes well for tonight’s all important Nonfarm Payroll report. In US stocks, DJIA +93 points closing at 12719, S& P +14 points closing at 1353 and NASDAQ +38 points closing at 2872. Looking ahead, June Nonfarm Payrolls forecast at 90k vs. 54k previously. June Unemployment Rate forecast unchanged at 9.1%.
The Euro (EUR) saw day lows in the European session before the ECB meeting and Trichet Press conference. The market turned around after the ECB raised rates as expected and Trichet commented they will be accepting Junk rated Portugal bonds as collateral for ECB bonds. The Market ended slightly higher against the USD but large gains were seen against the GBP and JPY. Overall the EUR/USD traded with a low of 1.4220 and a high of 1.4375 before closing the day around 1.4350 in the New York session. Looking ahead, May German Trade Balance forecast at 12bn.
The Japanese Yen (JPY) was a major mover reacting to the strong US jobs numbers by breaking above resistance at Y81 and threatening to break out to the topside if NFP numbers are strong from the US tonight. Support is seen from AUD/JPY and EUR/JPY which are well positioned technically to push higher after pulling back and find support last week. Overall the USD/JPY traded with a low of 80.78 and a high of 81.42 before closing the day around 81.30 in the New York session.