EUR surging high against the Greenback

The Euro surged to a 2-day high against the U.S. dollar yesterday, as a wave of risk demand swept the markets in the wake of upbeat economic data from both the United States and China. After suffering losses against several of its major counterpart yesterday, the USD continued to fall as the dollar index traded at 80.441 this morning, down from 80.484 late last night.
Later today (1330GMT) the U.S Department of Labor will release its first Unemployment Claims report after the release of the Non-Farm Payrolls. The market predicts that the, jobless claims will show a slight improvement – a drop from 469K to 452K, pushing the U.S dollar higher.

Also out today (1330GMT), the US and Canada will simultaneously release their trade balances. This double-feature release always triggers action in USD/CAD at the forex online market. For a third month the U.S trade deficit is predicted to widen slightly from 40.2B to 40.9B, as imports are expected to have grown faster than exports. North of the boarder, the market forecasts that Canada’s trade deficit will cross into a surplus of 0.3B.

Yesterday, the USD/CAD touched on a 5 month low, as the Canadian dollar continued to rise for the ninth straight day against its neighboring U.S. currency - the longest streak since 2004. The Loonie continued to trade at its strongest level in almost two months as crude oil, the nation’s largest export, neared $82 a barrel. Tomorrow, Statistics Canada will release the nation’s unemployment change. Last month, the unemployment dropped to 8.3%, following a rapid surge in jobs of 43,000. The market expects that the number of employed people will increase by 17.5K in February, holding the unemployment rate steady at 8.3%

Across the Atlantic, the Pound fell for a third day against the Euro and the U.S Dollar as U.K factory production unexpectedly dropped in January for the first time in five months, signaling that manufacturing sector is struggling to shake off the nation’s longest recession in history. The office of National Statistics announced yesterday that manufacturing production fell 0.9% between December and January, against market expectations of a 0.3% increase. Following the release of the report, the Pound tumbled against 15 of its 16 major currency counterparts. The GBP fell 0.4% against the U.S dollar to touch on $1.4934, and slide 0.5% down against the Euro to hit a near three month high. This disappointing drop in factory production adds to economists’ speculation that U.K. gross domestic product will be weak or may even be negative for the first quarter of this year. The GBP/USD closed at 1.49819, down 0.114% from its opening price.