EU Morning Report

Euro falls weighed by Greece's growing debt problems

  • The euro plummeted against its major counterparts during the European session on growing fears about Greece's condition. Talks about a Greek default weighed on the single currency which spurred eurozone debt contagion fears. On Friday, Juergen Stark announced that he is resigning from the European Central Bank as a protest to the bank's bond purchases. Against the US dollar, the euro dipped to a seven-month low at 1.3536 from 1.3936. Against the Japanese yen, the euro fell to a ten-year low at 104.27 from 107.99, a decline of 3.4%.
  • The US dollar edged higher against a basket of currencies on heightened risk aversion in the market. With the Swiss franc losing its safe haven appeal and Japanese yen weighed by fears of an intervention by the Bank of Japan investors turn to the US dollar. Against the Japanese yen, the greenback fell to 77.00 down from 77.85 traded on Friday. Against the Swiss franc, the dollar rose to 0.8909 from 0.8705.
  • The Australian dollar dropped against the greenback on Friday as concerns Greece may default put high yielding currencies under pressure. Further weighing on the Aussie is data showing that Australia's trade surplus unexpectedly narrowed in July. Today the pair extends its decline trading as low as 1.0322 from 1.0634. 
  • Oil prices ticked lower to 85.23 dollars a barrel from 89.47. Gold fell to 1823.35 dollars an ounce from 1885.75. Silver shed 4.5% dropping to 40.75 dollars an ounce from 42.68.

Currencies to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.3650 with a preference to enter Short positions at 1.3640
  • § The USDJPY pivot point is at 77.45 with a preference to enter Short positions at 77.35
  • § The OIL pivot point is at 86.35 with a preference to enter Short positions at 86.35
  • § The Gold pivot point is at 1870 with a preference to enter Short positions at 1870                          

Today's calendar and market movers:

  • § No major economic data is expected today

Equity Markets:                                                

US equities were negative on Friday with the S&P500 trading down -2.67% and the DJIA down -2.69%. The European bourses were also negative with the FTSE trading down -2.35%, the DAX down -4.04% and the CAC down -3.60%. The NIKKEI and the HSI at the time of writing are trading down -2.25% and -3.97% respectively.

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