1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Daily FX Market Outlook by AceTrader-30-11-2010

Discussion in 'Forex Daily News & Outlook' started by acetraderfx, Nov 29, 2010.

  1. acetraderfx

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

    Dec 15, 2008
    Likes Received:
    Market Review - 29/11/2010 21:25 GMT

    Euro tumbles to a fresh 2-month low on lingering European debt contagion fears

    Euro sank to a 2-month low against dollar on Monday as investors were left unimpressed with Ireland's rescue package announced which had failed to stem concerns that the European debt crisis would spread further.

    Although the single currency opened higher and rose to 1.3355 in New Zealand/Australia on Monday after Sunday's confirmation of a 85 billion euro bailout for Ireland, renewed worries over Portuguese and Spanish debts problems pressured price again and euro nose-dived to 1.3182 before recovering due to pro-euro remarks by various eurozone ministers. However, renewed selling at 1.3302 in European morning pushed the single currency to a fresh two-month low at 1.3064 in NY morning before stabilizing. Euro was also pressured by the lukewarm response to Italian debt auction.

    Earlier, the EU Finance Ministers approved the outline of a permanent crisis-resolution system that could make the private bondholders share the burden of restructuring sovereign debt after 2013. The aforesaid package was contributed by two eurozone rescue funds, the World Bank and some bilateral loans from key Irish trading partners. 10 billion would be used to recapitalize Irish banks and budget deficit would be reduced to 3% GDP.

    In other news, this week will see a total estimated 24 billion euros worth of bond auctions from Spain, Germany, Italy, France and Belgium. In addition, French finance minister Christine Largarde said the 85 billion euro Irish bailout package should be 'sufficient' and she had confidence in Portugal's ability to implement a rigorous austerity plan. German finance minister Wolfgang Schaeuble said he hopes the Ireland's aid would restore calm to markets and Portugal on track with consolidation plan but he also said the situation in Ireland is difficult.

    Although the greenback retreated to 83.82 versus the Japanese yen initially, the pair rebounded and edged higher to 84.41 due to dollar's broad-based strength before staging a pullback.

    The British pound rebounded to an intra-day high of 1.5647 in Europe but cable retreated and fell sharply in tandem with euro and reached 1.5528 before staging a minor recovery.

    Economic data to be released on Tuesday include:

    Japan Manufacturing PMI, industrial production, unemployment rate, Australia current account, Germany unemployment rate, Canada GDP, US consumer confidence.

Share This Page