2013-02-25 13:13:05 European Session – Euro gains ground as focus turns to Italy elections
February 25, 2013 1:13 pm
The euro recovered losses against the dollar, rising 0.3 percent on the day from Friday’s six-week low of $1.3144 to a session high of $1.3273. The single currency was helped by a successful Italian government debt auction today which resulted in the sales of 4.1 billion euros of debt.
There is some position adjustment ahead of an unpredictable election in Italy. Exit polls will be published shortly after polls close at 1400 GMT on Monday. Full official results are expected by early Tuesday.
All eyes are on Italy because it is the euro zone’s third largest economy so a weak government could usher in new instability in and cause another crisis of confidence in the European Union’s single currency.
The yen took a hit again today and is trading lower against the dollar compared to last week. The Japanese currency sank to a near three-year low against the dollar in early Monday trading on speculation that the Japanese government is about to nominate a dovish Governor of the Bank of Japan. The likely nomination is current Asian Development Bank President Haruhiko Kuroda, who is seen as favouring bold monetary policy. The incumbent, Masaaki Shirakawa steps down on March 19.
USDJPY opened in Asia with a gap higher at 94.50 yen compared to Friday’s close of 93.38. This is the highest since May 2010. The pair has since moved lower on profit-taking to 93.70 but still higher than Friday levels. EURJPY opened at 124.89 versus Friday’s closing of 123.18 and pulled back slightly towards 124.10.
The other biggest mover today is sterling which tumbled on news over the weekend that Moody’s downgraded the UK and stripped it of its prized AAA credit rating, bringing it down to AA1.
This is the first time the UK as lost its top notch rating since 1978, which Moody’s said was due to expectations that growth will “remain sluggish over the next few years”. It also said that the UK government’s debt reduction programme faced significant “challenges” ahead.
GBPUSD dropped to a 31-month low of $1.5071 in early Asian session trading, before correcting slightly to above $1.5125. The pound fell to a 15-month low of 0.8770 pound per euro. The pound is currently down 0.3 percent from late last week.
Sterling has been under tremendous pressure recently because of expectations the Bank of England could expand its quantitative easing further to boost the sluggish UK economy.
The euro recovered losses against the dollar, rising 0.3 percent on the day from Friday’s six-week low of $1.3144 to a session high of $1.3273. The single currency was helped by a successful Italian government debt auction today which resulted in the sales of 4.1 billion euros of debt.
There is some position adjustment ahead of an unpredictable election in Italy. Exit polls will be published shortly after polls close at 1400 GMT on Monday. Full official results are expected by early Tuesday.
All eyes are on Italy because it is the euro zone’s third largest economy so a weak government could usher in new instability in and cause another crisis of confidence in the European Union’s single currency.
The yen took a hit again today and is trading lower against the dollar compared to last week. The Japanese currency sank to a near three-year low against the dollar in early Monday trading on speculation that the Japanese government is about to nominate a dovish Governor of the Bank of Japan. The likely nomination is current Asian Development Bank President Haruhiko Kuroda, who is seen as favouring bold monetary policy. The incumbent, Masaaki Shirakawa steps down on March 19.
USDJPY opened in Asia with a gap higher at 94.50 yen compared to Friday’s close of 93.38. This is the highest since May 2010. The pair has since moved lower on profit-taking to 93.70 but still higher than Friday levels. EURJPY opened at 124.89 versus Friday’s closing of 123.18 and pulled back slightly towards 124.10.
The other biggest mover today is sterling which tumbled on news over the weekend that Moody’s downgraded the UK and stripped it of its prized AAA credit rating, bringing it down to AA1.
This is the first time the UK as lost its top notch rating since 1978, which Moody’s said was due to expectations that growth will “remain sluggish over the next few years”. It also said that the UK government’s debt reduction programme faced significant “challenges” ahead.
GBPUSD dropped to a 31-month low of $1.5071 in early Asian session trading, before correcting slightly to above $1.5125. The pound fell to a 15-month low of 0.8770 pound per euro. The pound is currently down 0.3 percent from late last week.
Sterling has been under tremendous pressure recently because of expectations the Bank of England could expand its quantitative easing further to boost the sluggish UK economy.
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