Forex Daily Technical Report EUR/USD Breaks 1.33 Level, US CPI Watched
Euro broke out of recent range and surges to new high at 1.33 level today on back of disappointing NY state and Philly Fed index from US yesterday. Former Fed Chairman Greenspan's comment that the subprime mortgage problem was "not a small issue" weighs on the greenback too. Greenspan also said that the economic fallout from the subprime market may not be contained to the financial sector and more pain could be in the pipeline. However, dollar is still kept in established range against yen, sterling and canadian dollar. Markets will focus on today's CPI release to see whether it can trigger broad based dollar weakness.
Growth in core CPI peaked last Sept at 2.9% and moderated to 2.6% in Dec. However, Jan's rise of 2.7% prompted speculation that such moderate may have bottomed.
