Forex: Monday's review
19.07.2011, 07:37

Forex: Monday's review

Yesterday the dollar strengthened against a basket of rival currencies on concerns about the euro-zone debt crisis and the lack of agreement on raising the U.S. debt ceiling
The market players focus on U.S. debt ceiling talks. If the debt ceiling isn’t raised from the current $14.3 trillion by August 2, the country would face technical default.
Early Monday the rating agency Moody's suggested the US debt ceiling itself should be eliminated to bring greater stability and avoid "periodic uncertainty."
The global debt concerns overshadowed the latest corporate reports, which have been generally better than expected.
The euro fell versus major rivals. 
Italy 10-year yield rose to 6.02% - highest since November 1997. Spanish bond yields also surged euro-lifetime highs.
Also analysts determined last week’s stress test of banks in Europe was fairly relaxed, stoking continued concerns about European debt.
Late Friday the European Banking Authority’s long-awaited stress tests showed that 8 banks failed and will need 2.5 billion euros ($3.5 billion) to survive a serious downturn. 16 other lenders passed, but should raise more money.
European sovereign fears, combined with wrangling over raising the debt ceiling, have boosted safe havens.
The franc reached a new record high versus the dollar on demand for safety after ECB President Jean-Claude Trichet noted again his opposition to any restructuring of Greek debt.
The gold reached a new historical high at $1.603.80. Investors see gold as the best place to park their money when there's economic or political uncertainty.

EUR/USD: the pair  shown low in $1.4010 area. Later the rate restored and finished session in $1.4100  area.
GBP/USD: on results of yesterday's session the pair decreased in  $1.6050 area.
USD/JPY: the pair holds at Y78.90-Y79.20.

 

It is a fairly sparse calendar for Europe again on Tuesday with  data limited to the 0900GMT release of both EMU construction output data for May and also the closer-watched German ZEW data for July, which is  expected to show the expectations index decline to -12.0 and the current conditions slip to 85.0.
US data starts at 1145GMT with the weekly ICSC-Goldman Store Sales data, which is followed at 1230GMT by Housing Starts and Building Permits data. The pace of housing starts is expected to rise to a 575,000 annual rate in June, which would be a second straight gain. 

 

 

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