EU Morning Report

Greece's credit rating gets downgraded again

  • The euro plummeted on Monday after rating agency Standard & Poor's downgraded Greece's credit rating. Greece's rating fell by two levels to B and will be kept on a negative credit watch. The single currency continues to be under pressure weighed by a rumor saying that Greece is considering leaving the euro zone. Against the dollar, the euro fell as low as 1.4254 from 1.4441. Today, the pair resumes its fall and it was last trading at 1.4282. The euro slid to one month low versus the sterling hitting 0.8719 from 0.8817.
  • The US dollar got a boost yesterday against the euro. As appetite for risk lowers, investors' demand for safe haven bets increases. Against the Swiss franc, the greenback plummeted to 0.8707 from 0.8787. No major US economic data was announced yesterday.
  • Against the Japanese yen, the dollar fell yesterday weighed by a heightened risk aversion in the market. The pair traded lower hitting a low at 80.15 from 80.82.
  • The Australian dollar edged higher yesterday supported by surging commodity prices. Data showing that Australia's trade balance returned to a 1.74 billion surplus also helped the Aussie. The Aussie remains supported by speculation the central bank will hike rates in the following months following the central bank's increased inflation forecast. The Aussie rose as high as 1.0811 dollars from 1.0708.
  • Sterling plummeted to a three-week low at 1.6270 versus the greenback after data showed Housing Prices plunged 1.4% in April. Later retail sales data showed solid figures for April and the pair recovered its losses rising to 1.6421. 
  • Oil prices rose to 103.38 dollars a barrel from 97.43. Gold ticked higher recovering to 1513.95 dollars an ounce from 1490.45. Silver also edged higher climbing to 37.96 dollars an ounce from 35.61.  

Currency to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.4445 with a preference to enter Short positions at 1.4445
  • § The USDJPY pivot point is at 80.85 with a preference to enter Short positions at 80.75               

Today's calendar and market movers:

  • § Switzerland Consumer Price Index in April is forecasted to gain 0.6%
  • § US Import Price Index in April is forecasted to gain 1.8%

Equity Markets:                                            

US equities were positive on Monday with the S&P500 trading up 0.45% and the DJIA up 0.36%. The European bourses were negative with the FTSE trading down -0.57%, the DAX down -1.09% and the CAC down -1.25%. The NIKKEI and the HSI at the time of writing are trading up 0.43% and 0.76% respectively.

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