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Daily FX Market Outlook by AceTrader-25-11-2010

Discussion in 'Forex Daily News & Outlook' started by acetraderfx, Nov 24, 2010.

  1. acetraderfx

    acetraderfx Content Contributor <img src="http://www.einvestor

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    Market Review - 24/11/2010 21:20 GMT

    Euro falls to 2-month low on worries over Irish debt problems


    Despite euro's sideways trading in Asia on Wednesday, increasing concerns over eurozone debt contagion weighed on the single currency. Price extended recent decline to 1.3284 before staging a rebound on short-covering. The single currency briefly bounced to 1.3422 on the back of strength in European equities, however, renewed selling there pushed price lower in NY afternoon.

    Although Ireland's four-year austerity plan was announced and the government would cut its budget by 15 billion euros, contagion fears continued to pressure euro. The adjustment included 10 billion euros in spending reductions and 5 billion euros in tax and revenue raising measures. Spending savings will be made up of current expenditure cut of 7 billion euros and capital investment by 3 billion euros.

    In addition, Spain's economy minister, Elena Salgado said markets should focus on Spain's economic fundamentals such as its austerity measures and financial reforms. Elena Salgado reiterated that there is no risk Spain will need a bail out and added Spain's economy is very different from that of Greece or Ireland.

    The greenback rebounded to 83.37 versus the Japanese yen in Asia on Wednesday after Tuesday's selloff to 82.78. Although the pair retreated, renewed buying interest at 82.94 lifted the pair again and the greenback reached an intra-day high of 83.66 in NY afternoon.

    Cable staged a modest bounce to 1.5838 in tandem with euro after Tuesday's selloff. Although cable fell to 1.5742 later, the British pound rebounded briefly on short-covering after the release of U.K. GDP data which came in as expected at 0.8% q/q and 2.8% y/y.

    US stocks rebounded strongly following the slump in the previous session. DJI ended the day up by 1.37% at 11187.

    On economic front, U.S. durable good dropped unexpectedly by 3.3% in October whilst U.S. jobless claims decreased to 407,000 versus economist's forecast of 435,000 with upwardly revised 441,000 in the previous week. U.S. new homes sales data dropped by 8.1% to 0.283 million versus the expectation of 0.31 million.

    Economic data to be released on Thursday include:

    Japan Trade data, Germany Import price index, Swiss Payrolls, U.K. CBI distribution trade (U.S. is closed for holiday).
     
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