Today's Action

Once Again Greece bailout news moves the market. Any conclusions yet?

Before the answer, a recap of the numbers: (as of 19:15 GMT)
EURUSD : 1.3680 (-48 pips)
GBPUSD : 1.5690 (+107 pips)
AUDUSD : 0.8905 (+153 pips)
USDCAD : 1.0495 (-134pips)
GOLD : 1093.00 (+ $20.00)
CRUDE OIL : 75.50 (+ 1.00)
S&P 500 Futures :1076 (+10.25 points)

Yes, No, Maybe?

The ongoing EU Summit led to many headlines today. Initially, the Euro rallied on a statement that the EU promised to take determined and coordinated action, if needed, to safeguard financial stability in the euro area as a whole. This was initially interpreted as a sign, that EU leaders will provide a backstop and offer financial support. However, as the EU Summit ended, and no concrete plan for Greece submitted, it became apparent that the EU leaders weren't yet ready to bailout Greece, and preferred to offer support to the Greek government in their spending cut plans.

This all caused the EURUSD to see saw throughout the day. During the morning optimism, it traded to 1.3800, but then crashed down to 1.3600 as sentiment began to change. Nevertheless, Forex traders did return to buy the euro as it appeared that although a bailout wasn't in place, EU leaders were ready to act quickly if need be. As such, the EURUSD has bounced and now stands around 1.3675.

Initially, the worry and optimism of the Greece bailout was affecting the entire Forex market. However, since the afternoon, currencies have begun to have a mind of their own. The Aussie especially is outperforming the market, as the AUDUSD is up 1.7% to 0.8900, and is benefitting from much better than expected Australian employment numbers this morning.

Now What?

The real question is what happens next for the rest of the PIGS. If Greece does end up with a financial bailout, Portugal and Spain will be next in line to put out their hands for help. If so, this could cause a continued drag on the euro going forward. A key component will come tomorrow as German GDP is released. If the numbers are better than expected, it could cause contagion fears to subside, and relate that the Eurozone countries are strong enough to shoulder financial support for their weak brethren.