Euro recovers losses but still fragile
- Euro recovered some of its losses on Wednesday after it slid on Tuesday weighted by rating agencies' decision to put Portugal and Greece's debt rating on review for a possible downgrade. Also, France appeared to face sovereign debt problems as well further weighing on the single currency. On Tuesday, the euro broke below the 1.31 level falling as low as 1.3074 and today recovered to 1.3145 supported by talks that Asian central banks bid on the euro in a thin and choppy end of year trade.
- Against the safe haven Swiss franc, the euro hit a fresh record low at 1.2532 on Tuesday after tensions in Korea and euro zone contagion fears raised demand for the safe haven currency. The pair is now trading at 1.2543 threatening to hit a fresh record low. The euro fell versus the Japanese Yen on Tuesday finding support at 109.56 before it recovers some of its losses to trade at 110.11.
- Against the Japanese Yen, the greenback rose to 83.90 on Tuesday's currency markets from 83.49. On Wednesday, the dollar surrendered some of its losses to trade at 83.72 yen. The US dollar extends losses against the franc on Wednesday hitting a two month low at 0.9533.
- The Canadian dollar fell on Tuesday weighted by data showing inflation declined more than the market expected in November and disappointing retail sales in October. The dollar hit 1.0205 versus the Loonie but today the pair fell to trade at 1.0154.
Currency to watch out for: EURUSD & USDJPY
- § The EURUSD pivot point is at 1.32 with a preference to enter into Short positions at 1.3190
- § The USDJPY pivot point is at 83.50 with a preference to enter Long positions at 83.55
Today's calendar and market movers:
- § UK Gross Domestic Product is forecasted at 0.8% QoQ and 2.8% YoY.
- § US Annualized Gross Domestic Product is forecasted at 2.8%
- § US Existing Home Sales is expected at 4.75M
US equities closed positive on Tuesday with the S&P500 up 0.60% and the DJIA unchanged. The European bourses edged up with the FTSE traded up 1.02% and the DAX and the CAC traded up 0.85% and 1.09% respectively. The NIKKEI and the HSI at the time of writing are trading down 0.23% and up 0.10% respectively.