EU Morning Report- Euro stays firm hovering above the 1.36 level

By @ibtimes on

Euro stays firm hovering above the 1.36 level 

  • Euro rose today towards a two month high helped by a heightened risk appetite and speculation that the ECB will lift the interest rates. ECB President Jean Claude Trichet expressed the central bank's inflation concerns and led investors to assume that the ECB will lift rates before the Fed.  The euro appears firm hovering above the 1.36 level after it hit a two month high at 1.3683 versus the dollar. 
  • The Australian dollar edged lower versus the US dollar on Tuesday after Consumer Price Index showed lower than expected figures. The Aussie slipped as low as 0.9926 dollars from 1.0020 as the disappointing CPI reinforces the view that no rate hike will occur in the near future. Gold prices extend losses today further weighing on the Aussie. But heightened risk appetite in today's currency markets supported the Aussie from declining further and pushed it back to 0.9971.
  • Against the Japanese Yen, the US dollar fell after the Bank of Japan decided to keep its monetary policy loose by keeping the country's interest rates unchanged. The pair slid as low as 82.32 from 82.57 and the pair was last traded at 82.46.
  • Sterling eased today against the greenback falling to 1.5945 from 1.6015 ahead of the UK Gross Domestic Product in the fourth quarter, which is expected to show a slowdown in the economy.
  • The greenback plummeted against the Swiss franc after a suicide bombing blast in Moscow's airport spurred demand for the safe haven franc. The dollar slid as low as 0.9469 against the franc from 0.9683.
  • Gold resumes its downward direction for the second straight day as investors' appetite for riskier assets hurts demand for the precious metal. Gold prices dipped to a two month low at 1329.75 dollars an ounce from 1353.23 traded in the beginning of the week.

Currency to watch out for: EURUSD & USDJPY

  • § The EURUSD pivot point is at 1.3575 with a preference to enter into Long positions at 1.3585
  • § The USDJPY pivot point is at 82.70 with a preference to enter Short positions at 82.65   

Today's calendar and market movers:

  • § UK Gross Domestic Product in Q4 is forecasted to fall to 0.5%
  • § US Consumer Confidence in January is forecasted to rise to 54.5
  • § Canada's Consumer Price Index in December is forecasted to gain 2.5%

Equity Markets:

US equities closed positive on Monday with the S&P500 traded up 0.58% and the DJIA traded up 0.92%. The European bourses are also positive with the FTSE trading up 0.81%, the DAX trading up 0.08% and the CAC up 1.39%. The NIKKEI and the HSI at the time of writing are trading up 1.12% and up 0.48% respectively.

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