Euro plummets as hopes for a rescue plan fades
- The euro hit a one month high against the greenback yesterday after the G20 meeting on hopes the EU leaders will result to a concrete plan to resolve Europe's sovereign debt crisis during the EU summit on October 23. The pair broke above the 1.39 level rising to 1.3914 but later the pair surrendered its gains to trade as low as 1.3724 after the German Finance Minister Schaeuble comments. Risk appetite was hit after he said that any plan announced during this week's EU summit will not provide a quick fix to Europe's debt problems. Also, a German government spokesman, Siebert, spoke yesterday warning not to hope for a comprehensive plan that will solve everything by next Monday and that the search for a rescue plan will continue in 2012. Against the Japanese yen, the euro shed 2% declining to 105.36 from 107.67. Versus the Sterling, the euro slid to 0.8708 from 0.8796.
- The US dollar edged higher against a basket of currencies on Monday supported by a heightened risk aversion in the market. Demand for the safe haven currency was further supported after poor US economic data. Empire State Manufacturing data came in -8.5 while the market expected -4. Focus turns to the Producer Price Index.
- The British pound followed the euro lower yesterday as optimism the eurozone debt crisis will soon be resolved was tempered by the German officials. Against the dollar, sterling dipped to 1.5730 from 1.5847 but today the pair recovered to 1.5821. Eyes turn to the Consumer Price Index data expected today at 08:30 GMT and higher than expected figures may create a problematic situation for the Bank of England. Today's inflation data is the first since the Bank of England decided to extend the size of its quantitative easing program.
- Oil prices shed 2.7% falling to 85.82 dollars a barrel from 88.16. Gold dropped to 1664.82 dollars an ounce from 1694.89. Silver edged lower at 31.42 dollars an ounce from 32.64.
SHORT @ 1.3820
SHORT @ 76.95
SHORT @ 1.5845
SHORT @ 1.0285
LONG @ 1665
LONG @ 86.10
1data generated by Trading CentralTM, 2data obtained from easy-forex Inside ViewerTM
UK Consumer Price Index in September
Economic Sentiment in October
Producer Price Index in September
3at the time of writing
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