Moody's downgrades Spain's rating by two notches

  • The euro rallied against the greenback during yesterday's US session after a report from the UK's Guardian newspaper said that Germany and France agreed on a 2 trillion dollar rescue deal to fight Europe's debt problems. But investors' risk appetite remains in check after rating agency Moody's cut Spain's rating by two notches to A1 from Aa2. It seems that investors' attention is focused on this week's EU summit which is expected to result to a plan to resolve Europe's sovereign debt crisis. Against the dollar, the euro initially fell to 1.3656 from 1.3787 but today the pair rallied to trade above the 1.38 level at 1.3839. Versus the Japanese yen, the single currency gained 1.4% jumping to 106.22 from 104.77.
  • The US dollar edged lower against a basket of currencies on Tuesday as investors appear optimistic that the weekend's summit will provide a fundamental solution. Producer Price Index data showed a higher than expected gain of 0.8% in September while 0.2% was expected. Focus now turns to Consumer Price Index expected today.
  • The British pound fell yesterday after higher than expected UK inflation data. The Consumer Price Index showed the annual inflation rose to 5.2% in September, which is the highest since September 2008. The figures weighed on the sterling as they raised concerns the UK may suffer from a slow growth and elevated inflation levels. Against the dollar, sterling dipped to 1.5631 from 1.5821 but today the pair trimmed some of its losses to trade at 1.5769. Eyes turn to the Bank of England policy meeting minutes at 08:30 GMT that may provide an insight on which policymakers voted in favor of extending the size of the bank's quantitative easing program.
  • Oil prices gained 4.1% rising to 89.01 dollars a barrel from 85.53. Gold dropped to 1626.84 dollars an ounce from 1676.60 but later rebounded to 1665.06. Silver edged lower at 30.35 dollars an ounce from 31.99 and later recovered to trade as high as 32.29.

 

OUTLOOK  ?

 

Pivot

Preference1

Sentiment2

 

EURUSD

1.3830

SHORT @ 1.3820

  • § 42% of deals buy EUR

 

USDJPY

77.00

SHORT @ 76.95

  • § 88% of deals buy USD

 

GBPUSD

1.5790

SHORT @ 1.5780

  • § 46% of deals buy GBP

 

AUDUSD

1.0185

LONG @ 1.0185

  • § 44% of deals buy AUD

 

GOLD

1643

LONG @ 1643

  • § 68% of deals buy GOLD

 

OIL

87.35

LONG @ 87.35

  • § 38% of deals buy OIL

1data generated by Trading CentralTM, 2data obtained from easy-forex Inside ViewerTM

CALENDAR ?     

Currency

Time (GMT)

Event

Forecast

 

USD

12:30

Consumer Price Index in September

0.3%

 

USD

12:30

Housing Starts in September

0.59M

 

EQUITIES     ?      

EUROPE

 

US

 

ASIA3

 

 

FTSE 100

-0.48%

?

S&P 500

2.04%

?

NIKKEI

0.32%

?

 

DAX

0.31%

?

DJIA

1.58%

?

HSI

1.25%

?

 

CAC

-0.79%

?

NASDAQ

1.63%

?

CSI

-0.23%

?

3at the time of writing

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