EU Morning Report

Euro falls as Greece's debt problems continue

  • The euro plummeted today as European leaders failed to reach an agreement on Greece's second bailout plan during a weekend meeting. Eurozone finance ministers said that a 12 billion loan is expected to be paid to Greece by mid-July as long as the new austerity measures are applied by the Greek government. Focus turns to Greece and the confidence vote due tomorrow. The Greek Prime Minister George Papandreou appealed for national unity and support for the unpopular austerity measures necessary to avoid a catastrophic default. Credit rating agency Moody's put Italy on a negative review further weighing on the single currency. Against the dollar, the euro dipped to 1.4216 from 1.4339.
  • The US dollar strengthened against high yielding currencies on heightened risk aversion but fell against the safe haven Japanese Yen. Escalating concerns over the euro zone debt problems and growing fears of a debt contagion further support the safe haven currency. Against the Japanese yen, the dollar fell to 80.01 from 80.67. The dollar also fell against the Swiss franc sliding to 0.8482 from 0.8516.
  • The Australian dollar edged lower today as debt problems in Greece sapped demand for high yielding currencies. Against the stronger dollar, the Aussie slid as low as 1.0522 from 1.0634 traded on Friday. Aussie's neighbor, the Kiwi, also plummeted to 0.8058 from 0.8136.
  • Oil prices fell to 91.38 dollars a barrel today from 95.34 traded on Friday. Gold edged higher at 1541.94 dollars an ounce from 1522.41. Silver also ticked higher to 36.10 dollars an ounce from 34.90.

Currencies to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.4300 with a preference to enter Short positions at 1.4290
  • § The USDJPY pivot point is at 80.50 with a preference to enter Short positions at 80.45
  • § The OIL pivot point is at 93.75 with a preference to enter Short positions at 93.75
  • § The Gold pivot point is at 1528 with a preference to enter Long positions at 1528                       

Today's calendar and market movers:

  • § Europe Current Account in April is forecast to fall to -6.6B

Equity Markets:                                              

US equities were positive on Friday with the S&P500 trading up 0.3% and the DJIA up 0.36%. The European bourses were also positive with the FTSE trading up 0.28%, the DAX up 0.76% and the CAC up 0.83%. The NIKKEI and the HSI at the time of writing are trading up 0.17% and down -0.06% respectively.

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