Wednesday, May 9, 2007

Euro Declines Against Franc, Choppy Versus Other Majors; Small Morning Wednesday Deals, Wednesday, May 09, 2007 3:40:55 AM

Ahead of the release of the German trade balance and the current account data for the month of March, the European currency generally showed choppy trading in the small morning hours on Wednesday. Amid the release, the Euro made some advances against the dollar and the Yen, but it lost ground versus the rest of majors. Soon after, the euro changed the direction against most of the majors, but it continued its downtrend against the Swiss Franc.

German trade surplus increased to EUR18.4 billion in March, the Federal Statistical Office said Wednesday. Trade surplus widened from EUR14.2 billion in February. Exports grew 9.3% on year to EUR83.9 billion, while imports climbed 4.6% to EUR65.5 billion. The current account of the balance of payments showed a surplus of EUR17.2 billion, larger than EUR9.5 billion recorded last year.

The market now turns toward the British April BRC shop price index. The US Federal Open Market Committee rate decision is slated for 2:15 pm ET. Economists expect the central bank to leave interest rates unchanged once again, but traders will scrutinize the Fed`s policy statement for signs as to what the next move will be.

Against the U.S. dollar, the European currency made advances during late Tuesday trading in New York. At about 11:10 pm ET, the euro weakened slightly and showed an uncertain trend. The euro resumed the same trend into the small morning hours on Wednesday, but by about 2:00 am ET, following the release of the German economic data, the pair ticked slightly higher. After collecting as much as 1.3552 by about 2:20 am ET, the euro shed a few pips. As of 3:39 am Eastern Time, a Euro was worth 1.3540 dollars.

In the late hours on Tuesday, the European currency traded in a range versus the Pound. The euro lost a few pips by about 10:35 pm ET but the pair entered a range within about an hour. However, the German March trade balance data released at 2:00 am ET Wednesday, weakened the euro slightly. Off 0.6800 by about 2:10 am ET, the pair bounced back the recent losses. As of 3:39 am Eastern Time, a Euro fetched 0.6807 against the Pound.

On late Tuesday in New York, the European currency lost ground against the Japanese Yen. At about 9:30 pm ET, off 162.02 the euro gained some momentum and showed a choppy trend thereafter. The pair extended the same trend until the German economic data was released at 2:00 am ET Wednesday. Amid the release, the euro strengthened slightly but the gains were given back soon after. As of 3:39 am Eastern Time, a Euro traded at 162.25 Yen.

To the Swiss Franc, the Euro drifted lower on late Tuesday in New York and touched a low of 1.6484 at about 9:20 pm ET. Soon after, the euro traded slightly higher and then showed an uncertainty. However, at about 2:00 am ET Wednesday, following the German March trade balance and the current account data, the euro dropped heavily. As of 3:39 am Eastern Time, a Euro was quoted at 1.6486 Francs.
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