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Daily FX Market Outlook by AceTrader-7-12-2010

Discussion in 'Forex Daily News & Outlook' started by acetraderfx, Dec 6, 2010.

  1. acetraderfx

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

    Dec 15, 2008
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    Market Review - 06/12/2010 21:40 GMT

    Euro falls as European officials split on bailout fund increase

    The single currency remained under pressure on Monday as European officials showed divisions over the expansion of the eurozone bailout fund. Germany rejected IMF's call to increase the size of the 750 billion euro safety net but Belgian Finance Minister said the fund might be expanded. Euro fell from NZ's 1.3452 high and despite a brief pullback fm 1.3334 to 1.3381, euro tumbled again and reached 1.3246 in Europe before staging a recovery. Euro was also pressured as Moody's downgraded Hungary's sovereign rating by two notches to Baa3, the lowest investment grade rating and assigned a negative outlook.

    In other news, ECB's Bini Smaghi said the governments are committed to help system survive crisis and indicated European Financial Stability Facility (EFSF) should be increased if needed. Eurogroup's Juncker said eurozone finance ministers' meeting was technical and no new decision was taken but he indicated IMF and Eurogroup discussed Spain and Portugal while the two countries explained austerity and reform measures. Juncker later added that EFSF's CEO said there was no need to increase the funds for the time being.

    The greenback traded narrowly as focus remained on the single currency. The greenback initially rose against the Japanese yen to 82.99 but the pair retreated and edged lower to 82.57 in NY afternoon.

    In other news, Fed's chief Ben Bernanke said on Sunday in a rare pre-recorded interview with CBS that QE2 isn't necessarily limited to just $600 billion, implying the policy-makers could increase the size of the asset purchase program.

    The British pound edged lower on Monday in tandem with euro due to renewed concerns over eurozone debt problems. Cable fell from 1.5775 and eventually reached an intra-day low of 1.5655 in Europe before moving narrowly.

    Economic indicator to be released on Tuesday include:

    U.K. BRC retail sales, Australia RBA rate decision, Japan leading indicators, Swiss Jobless rate, U.K. Industrial production n manufacturing production, Germany Industrial production, Canada rate decision.

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