The euro rebounded today as jitters eased in Europe, where Merkel was able to pass the expanded powers of the European Financial Stability Facility through the German Parliament. In addition, German unemployment figures were unexpectedly better in September, which added some positivity and optimism to the market.
The vote in the Bundestag today was observed closely and feared for any surprises as Merkel loses support. Nevertheless, the vote passed with a strong majority and gave a signal to markets that Angela Merkel can still dominate, where the legislation passed with 523 votes in favor of the reform against 85 opposing votes and three abstaining.
Germany released the unemployment figures for September, where the seasonally adjusted unemployment retreated to 6.9% from 7.0% a month earlier. In addition, the unemployment change dropped beyond expectations by 26K, from the revised previous drop of 9 thousand.
The Euro opened the session today at 1.3542 against the dollar, and then retreated to a low of 1.3519. The EUR/USD pair rebounded to the upside on the cheerful employment figures to reach a high of 1.3678, while the pair is trading now around 1.3620.
International lenders, International Monetary Fund and the European Union, sent auditors again to Greece to inspect the tight austerity measures forced by the Greek government to meet the budget deficit targets in order to obtain the next installment of 2010's bailout package and avoid default.
Moreover, mixed fundamentals from the United Kingdom also supported sterling to trade higher against the dollar, where after the data today reflected better than expected mortgages approvals and lending, the pound gained strength as these data could support the Bank of England to hold APF quantity unchanged in October at least, which if occurred will have bearish impact on the currency.
Concerning the GBP/USD, the pair opened the session at 1.5574, and then retreated to a low of 1.5542; however, the pair rebounded to the upside as the weakening dollar supported the pound to gain strength, where the pair is currently trading at 1.5649 after reaching a high of 1.5701.
The U.S. dollar index retreated today as the euro, the royal currency, the Canadian dollar and the Swiss franc were able to gain strength, but on the other hand, the Japanese retreated against the dollar, though still trading within narrow levels.
Finally the dollar index (USDIX) opened the session at 78.03 and recorded a high of 78.15 and a low of 77.41, and is currently trading around 77.72.