Euro Falls Against Dollar and Yen

The already troubled Euro fell further against the US dollar and the Japanese Yen as investors predicted the European Central Bank would cut rates in an attempt to salvage the dismal European economy. For months the Euro has provided little or no Forex opportunity to investors. Concerns about the state of Eastern European economies also put pressure on the Euro.

ECB to Cut Rates

The ECB is expected to cut rates to 1.5% and in all probability will revise its forecasts to show a deep recession in the Euro Zone. Tsutomu Soma of Okasan Securities said, “In addition to a rate cut, investors will watch whether the ECB comes up with measures to help solve the problems the euro zone is facing as its neighboring countries, as well as some of its members, are stumbling.”

BOE to Cut Rates and Increase Money Supply

The British Pound fell again against the US dollar as the Bank of England is expected to lower rates further on Thursday and in all probability will start to increase the money supply in an attempt to bring the UK out of the ongoing global recession. The pound has provided limited forex investment opportunities for forex brokers and investors.

Concern Over Declining Japanese Economy and Political Instability

The Dollar rose further against the Japanese Yen and forex brokers remain concerned about the rapidly declining Japanese economy and political instability in Japan. The situation in Japan is rapidly deteriorating causing a lack of confidence in the government. Bank of Japan board member Miyako Suda said that it is uncertain whether the Japanese economy has hit bottom. There was one bright spot in all the data; China latest stimulus actions and data suggest that China is beginning to recover which brought a slight lift in risk appetite and forex opportunities.

US Non Farm Payrolls Due

Also due this week is the US Non Farm Payroll report. The news is not expected to be good and could send forex brokers and traders to the safe haven and forex opportunities of the US dollar. At present it would seem that the US dollar is the only safe haven currency left.