By Russell Glaser<\/p>\n
The US dollar rallied across the board after Moody\u2019s slashed the credit rating of Portugal. The lone exception is versus sterling following a significantly stronger than expected services PMI. The pound is by far the strongest performer <\/a>during European trading. China also raised interest rates 25bp. Market participants will be turning towards the US with the release of the ISM-Non Manufacturing PMI and the Fed meeting minutes.<\/p>\n After Moody\u2019s Investors Service downgraded the sovereign credit rating of Portugal the euro slumped while the dollar rallied. The credit rating was lowered to Baa1 from A3 and Moody\u2019s says the European peripheral nation could face a further drop in its credit rating. The move by Moody\u2019s does not come as a big surprise as this brings Moody\u2019s in line with Fitch Ratings who downgraded Portugal on April 1st. Following the downgrade the euro slumped to a daily low at 1.4158 after opening at 1.4192. Versus the Swiss franc the EUR\/CHF moved as low as 1.3053 from 1.3112 and is now trading at 1.3094.<\/p>\n A stronger than expected UK services PMI brought strong bids to sterling. The survey rose 57.1 in March from 52.6 in February and the GBP\/USD climbed to 1.6249 from 1.6116 before settling back at 1.6225. The pair looks on its way to the next resistance level at 1.6400.<\/p>\n The Australian dollar is off its all-time high for the second consecutive day. The declines come following the RBA holding interest rates steady coupled with a sharp drop in the trade balance. During the month of February the country was a net importer as the trade balance fell to a -0.21B deficit from a 1.43B surplus. Adding to the Aussie dollar\u2019s misfortune was this morning\u2019s Chinese interest rate hike. While monetary policy tightening was expected and largely priced into the market it remains a setback for Australia as China is Australia\u2019s largest trade partner and has a 23.1% share of Australian exports. A vast majority of these exports are mining products such as iron ore and coal. Traders may find viable entries long into the AUD\/USD at the 1.0250 support level off of the February high.<\/p>\n This afternoon traders will be following the ISM Non-Manufacturing PMI at 14:00 GMT. Expectations are high for the report that could show the seventh consecutive rise in the data. Fed meeting minutes are also due out at 18:00 GMT and may show further disputes between the hawks and the doves over US monetary policy.<\/p>\n The EUR\/USD may decline further as Thursday\u2019s ECB policy decision nears. A retracement target from last week\u2019s low to yesterday\u2019s high comes in at 1.4115. Below that stands the low from last Friday\u2019s payrolls release at 1.4060. To the upside the 1.4280 level should cap any short term gains.<\/p>\n Forex Market Analysis provided by ForexYard. <\/a><\/strong><\/em><\/span> \u00a9 2006 by FxYard Ltd<\/p>\n Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.<\/p>\n","protected":false},"excerpt":{"rendered":" The US dollar rallied across the board after Moody\u2019s slashed the credit rating of Portugal. The lone exception is versus sterling following a significantly stronger than expected services PMI. The pound is by far the strongest performer during European trading.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-20508","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/20508","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=20508"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/20508\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=20508"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=20508"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=20508"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n<\/a><\/strong><\/em><\/p>\n