EUR/USD retreated yesterday from a high of 1.3221 down to 1.3078 however we saw some buoyancy on the single currency and it pushed back up to 1.3197. We had German Retail sales out this morning that disappointed with a contraction in December on both a monthly and annual basis. The market was expecting growth. We also had a release of German Jobless data that came in better than expected this morning. Conversely we’ve had Italian December adjusted jobless figures that showed a rise to 8.9%. The median forecast was for 8.7%. After posting these recent highs I’d expect a downtrend now on EUR/USD with it pushing back into the 1.30s. In other data out today we have French consumer spending, French PPI and also Italian and Eurozone unemployment data. From the UK we have BoE mortgage approvals and lending data. We have bond auctions out in the form of 3 and 6-month bill sales from Belgium. Even with all these data releases the main focus will be on Greece, again. A deal has still not been struck. Portugal will be in the headlines before too long I feel.
With the uptick on EUR/USD we’ve saw GBP/EUR retrace back a little. On GBP/EUR, and as mentioned previously, I’d look at market orders around the 1.20 level. This is looking toppish now and if you can secure this level you’ll be achieving the high of the market. Please contact to discuss.
It's the end of January already and surprise surprise we’re still no further forward with a solution to the debt crisis. Greece PSI discussions are developing, albeit slowly, however the various power’s that be seem to have an uncanny knack of throwing spanners into the works at every opportunity. Germany has placed a demand that Greece gives up some national sovereignty and allow a central special EU commissioner to take control of their finances. The term ‘it went down like a lead balloon’ springs to mind. The southern and northern nations that make up the single currency are miles apart in what they feel is the ‘right’ thing to do. Self interest is still the order of the day.
GBP/USD is looking attractive at these levels to purchase USD. We’re back firmly into the 1.57s and if you have a USD exposure I’d look to secure at these levels. We don’t have too much from across the pond this afternoon with limited releases. Only figure of note is consumer confidence out at 15.00 (UK time).
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