Higher-yielding currencies, led by the euro and pound, managed to rebound today after falling against safe-haven currencies, led by dollar, yen and Swiss franc, earlier this week with the improvement in manufacturing data.
PMI manufacturing showed expansion for the fourth month in November in China, the fastest in four months in the euro area, and the strongest level in 16 years in the UK, ahead of the release of manufacturing data from the United States later in the day.
The progress seen in manufacturing data alleviated worries that global economies will grow at weak pace in the last quarter of 2010, where services data are due later on this week and next.
The upbeat data succeeded in lowering the jittery situation in markets that was triggered by the rising debt woes in the euro zone, inflationary pressures in China and escalating tensions between the two Koreas.
The dollar index, which tracks the dollar movements versus a basket of six currencies, slipped to a low of 80.77 compared with the day's opening price at 81.30 as it became overbought which prompted investors to sell it to lock in profits.
Accordingly, dollar-denominated commodities, more specifically gold and oil, climbed to take advantage of the dollar's drop for the first time in three sessions.
Concerning the euro-dollar pair, it rebounded today as the euro starts December with a gain after losing 6.9% against the greenback in November, yet it may find strong resistance at 1.3120 levels.
The euro lowered its losses before the ECB announces interest rate tommorow, where expectations refer to leaving both interest rate and stimulus unchanged in December while discussing methods to prevent the spread of the contagion to other highly indebted nations in the region.
Meanwhile, the pair is trading at 1.3109 after recording a high of 1.3112 and a low of 1.2968, while the trading range for today is among the key support at 1.2800 and the key resistance at 1.3145.
Moving to the royal pair, it halted its drop over the past three weeks as the buoyant manufacturing report outweighed the drop in house prices, measured by nationwide gauge, to nine-month low.
The pair is currently trading at 1.5629 after resting upon support at 1.5570 to push it to a high of 1.5646 while lowest point was recorded at 1.5550.
The trading range for today is among the key support at 1.5300 and the key resistance at 1.5675.
With regard to the dollar-yen pair, it advanced on the daily basis to continue its rebound from 15-year low that started since the beginning of November after taking a break yesterday.
Currently, the pair is trading at 83.75, reaching a high of 83.84 a low of 83.36, while the trading range for today is among the key support at 82.15 and the key resistance at 85.00.
