Dollar Rises As Crude Oil Declines On Low Demand

The dollar rose against the euro on speculation a drop in oil prices will support growth in the world's largest energy consumer. The greenback traded on a high versus the yen following the biggest decline in crude costs in more than three years. The euro fell against the yen before a survey tomorrow that may show business confidence in Germany slid to the lowest since 2005, German business confidence will discourage the European Central Bank from raising interest rates. 'Oil prices have come off the boil and that has done quite a lot to help the dollar,' said Akio Shimizu, chief manager of foreign exchange trading at Mitsubishi UFJ Trust & Banking Corp. in Tokyo. 'It does relieve some concern that the economic outlook will deteriorate.' The EUR/USD is currently trading at $1.4747 as of 7:31 am, GMT.

Sales of existing houses in the U.S. probably rose in July from a 10-year low as declining prices helped stabilize demand, economists said before a report today. Record foreclosures have pushed property values down even more, luring some bargain hunters into the market. Still, tougher lending rules, rising unemployment and a glut of unsold houses signal the outlook for residential real estate remains grim. 'Housing is searching for a bottom, but we are probably not there yet,' said Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio. 'Buyers are showing some interest because of the price declines.'

The British pound may extend its decline to $1.8300 in the next two weeks after the currency closed on Aug. 22 below so-called support at $1.8620, said Pak Lai Ng, a technical analyst at Forecast Pte Ltd. in Singapore. Momentum indicators such as the stochastic oscillator chart signal the pound may continue to weaken even as they show the currency is 'a bit oversold,' Ng said. 'It could stay oversold for a long time.' The GBP/USD is currently trading at $1.8458 as of 7:40am, GMT.

Economic Calendar

Finotec Group Inc.
http://www.finotec.com/

Disclaimer: FINOTEC Tradings Market Commentaries are provided for informational purposes only. The information contained within these reports is gathered from reputable news sources and not intended as investment advice. FINOTEC Trading assumes no responsibility or liability from gains or losses incurred by the information herein.