The euro dropped against a basket of currencies on concerns about the eurozone debt crisis. A poor Spanish bond auction yesterday resulted in higher Spanish bond yields raising fears about the funding problems of eurozone periphery countries. Sentiment is further hurt by the FOMC minutes as hopes for further quantitative easing by the Fed to boost the economy start to fade. Against the US dollar, the euro dropped to 1.3106 from 1.3232 after the ECB Interest Rate Decision. ECB decided to keep rates unchanged at 1% and ECB President Draghi aid that there are still downside risks to the eurozone economy but there are signs of stabilization.
The US dollar strengthened against its major as risk aversion spurred a heightened demand for the safe haven currency. The greenback is also supported by expectations that the Federal Reserve is less eager to conduct a third round of quantitative easing in an effort to support the economy. ADP Employment Change data showed that the US economy added 209 thousand new jobs last month ahead of Friday’s highly expected Non Farm Payrolls figures. Against the Swiss franc, the greenback rallied to 0.9182 from 0.9100 ahead of today’s inflation data, which is expected to influence Switzerland’s monetary policy. After a series of four month to month negative inflation figures last month showed a positive reading and the same is expected for this month so consensus does not favor intervention by Swiss National Bank.
The British Pound dropped to 1.5833 from 1.5910 against the US dollar but later recovered its losses to trade at 1.5908. Focus now turns to the Bank of England policy meeting where is expected to keep rates unchanged and its asset purchasing program unchanged. Manufacturing and Industrial Production data are also due today.
Oil prices dropped to 101.05 dollars a barrel from 103.97, a 2.8% decline. Gold slid to 1612.10 dollars an ounce from 1647.82, a 2.2% fall. Against the euro, gold fell to 1233.19 from 1243.80 an ounce. Silver plummeted to 30.99 dollars an ounce from 32.65. Stay in tune throughout the day with !
|EURUSD||1.3180||LONG @ 1.3170||57% of deals buy EUR|
|USDJPY||82.50||LONG @ 82.45||50% of deals buy USD|
|GBPUSD||1.5910||LONG @ 1.5905||47% of deals buy GBP|
|AUDUSD||1.0250||LONG @ 1.0250||74% of deals buy AUD|
|GOLD||1630.00||LONG @ 1630.00||77% of deals buy GOLD|
|OIL||103.25||LONG @ 103.25||83% of deals buy OIL|
|CHF||07:15||Consumer Price Index||0.4%|
|GBP||11:00||Interest Rate Decision||0.5%|
|USD||12:30||Initial Jobless Claims||355K|
|FTSE 100||-2.30%||?||S&P 500||-1.02%||?||NIKKEI||-0.28%||?|