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Adding To The Strength Of The EuroTitle:
The Weekly Bottom Line : 19/05/2012
The Weekly Bottom Line : 19/05/2012
HIGHLIGHTS OF THE WEEK
United States
- Global economic concerns ratcheted up this week. Widespread discussion of a Greek exit continued, Spanish banks faced rating downgrades and periphery sovereign debt yields moved higher.
- Financial markets have responded to these global worries with increased risk aversion. The S&P is poised to end the week 3% lower, and 10-year treasuries are yielding just 1.7%.
- U.S. economic data has proved somewhat more encouraging, but growth is still struggling to breakout beyond a moderate pace. This has kept the possibility of additional monetary stimulus alive even if the threshold remains quite high.
Canada
- Recent economic indicators are showing a resurgence of strength in the Canadian economy. Strong ...
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Downgrades Day
Forex News and Events:
In a race for downgrades, rating agencies took action targeting the two most burdened countries in the EMU. Moody’s confirmed today a rumor about the downgrade of 16 Spanish banks after having downgraded four Spanish regions, which added more pressure to the the Spanish economy. The increase in risk was reflected by 4-year Spanish Bonos yields, higher at 5.106% against a previous 4.319%. Fitch took over the Greek front by downgrading the country to CCC, adding that all EU countries would be on “Rating Watch Negative” if no pro-bailout government were formed following the elections on June 17. What’s more, while Greek banks are struggling for liquidity from EUR 700mn withdrawals since the elections and Greek central bank governor Provopoulos expecting EUR 100mn more, ...
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Greek And Spanish Woes Weigh On The Euro
Greek And Spanish Woes Weigh On The Euro
The euro (EUR) plummeted against the dollar sliding to a four-month low at 1.2655 from 1.2748 as risk aversion dominates the markets. World equities tumbled as investors fear that Greece may leave the euro after the second election in the country in June. Poor economic data from the US and concerns about the growing instability among Spanish banks further weighed on the single currency. Credit rating agency Moody’s downgraded 16 Spanish banks while shares in Bankia, the state-rescued lender plunged on news that clients have withdrawn 1 billion in the past week. Fitch downgraded Greece’s rating from BI to CCC, the lowest possible grade for a country not in default, citing the heightened risk that the country may leave the eurozone.
The US dollar ( ...
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Brent rise boosts premium to slumping U.S. crude
Brent oil edged higher on Tuesday, snapping three days of declines and pushing its premium to slumping U.S. crude back above $18 a barrel, as supportive German economic growth helped counter political turmoil in Greece.
Anticipation that inventory reports will show U.S. crude stocks rose an eighth straight time last week, adding to record stockpiles at Cushing, Oklahoma, helped pressure U.S. crude and increase its price deficit to Brent, brokers and traders said.
The approach of the June Brent contract's expiration on Wednesday also helped raise the premium to U.S. June crude to $18.26 a barrel based on settlements.
Brent's premium to U.S. crude pushed above $18 for the first time since April 16, when news of this week's planned reversal of the Seaway crude pipeline broke.
The pipeline ...
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Brent falls towards $111 on Greece jitters
Brent crude futures fell towards $111 a barrel on Tuesday as Greece's political and economic turmoil deepened and worries that the debt-laden country could leave the euro zone sparked a sell-off in dollar-denominated commodities.
Brent prices slid for a fourth consecutive day, hammered by fears of a slowdown in the global economy with European data due on Tuesday expected to show the region slipping back into a second recession in just three years.
China's decision to loosen monetary policy over the weekend also fed fears that the global economy is suffering as the crisis worsens, causing investors to flee from riskier assets and weighing on copper, gold and the euro.
Brent crude slipped 49 cents to $111.08 a barrel by 0452 GMT after sliding to $110.04 on Monday, its lowest intraday ...
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Euro drops to near 4-month low on Greek deadlock
The euro fell to a nearly four-month low against the dollar on Monday on fears Greece could exit the euro and worries that weak industrial data signaled that Europe was heading for recession.
Concerns about slowing Chinese and global growth also drove down higher-yielding currencies and boosted the safe-haven dollar and yen. The Australian dollar fell to a five-month low against the greenback, while the New Zealand dollar dropped to a 4-1/2-month trough.
Greece's political impasse, as a major Greek leftist party refused to join a unity government or create a government of technocrats, also pushed the country's sovereign spreads over German bunds to their widest level since November.
Greece's troubles helped drive up Spain's and Italy's borrowing costs. Spain's bill auctions also showed ...
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Oil falls as Greece, China feed economic worry
Oil prices fell on Monday as Greece's inability to form a coalition government and concerns about a slowing Chinese economy fed worries about the outlook for petroleum demand.
Greece's turmoil triggered selling in dollar-denominated copper and gold, sending a benchmark commodities index to a 19-month low, while pressuring the euro to a four-month low against the dollar and weighing on the stock market.
Hedge funds and large speculators made the biggest-ever cuts in their net long U.S. crude futures and options positions in the week to May 8, according to government data released on Friday, adding to this week's bearish sentiment.
Crude futures extended losses that, in the two weeks ending on Friday, left Brent crude down 6.2 percent and U.S. crude off 8.4 percent.
"The situation in ...
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Dukascopy Afternoon Forex Overview : 05/14/2012
Dukascopy Fundamental Analysis
EUR
Industrial production in the 17 countries that use the euro fell unexpectedly in March, leaving little doubt the region contracted for a second straight quarter in the first three months of the year and returned to recession, data by Eurostat showed Monday.
USD
Stocks fell, commodities declined to their cheapest level this year and the euro weakened to a three- month low on concern that Greece will exit the single European currency and after German Chancellor Angela Merkel’s party lost a state election.
GBP
The government, and many economists, say the U.K.'s austerity plan has succeeded in reassuring financial markets that the government is focused on wrestling down the country's debt, which had ballooned to the highest levels since World War II. As a ...
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Euro near 3-1/2 month low vs dollar as Greece wrangles
The euro hovered near a 3-1/2-month low on Friday as Greek political parties made efforts to form a coalition government, and looked fragile as risk sentiment struggled on weak Chinese data and JPMorgan's shock trading losses.
The common currency was steady at $1.2936 after earlier hitting a trough of $1.2905, its lowest level since January 23. Investors were heavily focused on Greece, where inconclusive election results on Sunday threw the country into political disarray and raised the risk of it exiting the euro zone.
The euro climbed to a session high of $1.2956 as Greek conservative leader Antonis Samaras said there were still hopes a government could be formed, but came further pressure when the leader of the moderate Democratic Left said the country was heading for a repeat poll.
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