European Session – Euro above $1.30 as Italy election impasse ends
April 24, 2013 2:36 pm
The euro ended the European session flat, after recovering quickly from a brief sharp drop on the back of disappointing news from Germany’s IFO, showing a deterioration in business sentiment in Europe’s largest economy. The index printed at 104.4 versus 106.4 expected.
Helping support euro is the fact that Italian and Spanish debt is performing especially well over the past several days, with yields falling to quite low levels. Part of this is due to the fact that the election impasse in Italy has finally ended, with the appointment of a prime minister today. Enrico Letta, deputy secretary of Italy’s biggest political party, was designated prime minister.
Focus now turns to next Thursday’s ECB policy meeting, with rising expectations for an easing in monetary policy. Speculation is for a 25 basis point cut to bring the interest rate to 0.50 percent.
EURUSD opened in Europe at $1.3002, little changed for the Asian session range. After a brief dip to $1.2953 post German IFO data, the pair rose back to prior levels, going into the US session above $1.3000.
Sterling gained against the dollar in the Europe session, rising from $1.5248 to a high of $1.5286. Some gains were pared late in the session after disappointing UK retail sales data from the the London-based Confederation of British Industry (CBI) business lobby group . Annual sales growth fell to minus 1 from zero in March, the weakest reading in eight months. Economists had forecast an increase to 8 points.
Sterling is expected to be supported in the near term following yesterday’s announcement of changes to the Funding for Lending Scheme (FLS). The credit easing measures were improved and reduce the pressure on the Bank of England to provide monetary stimulus.
Yen remains weak due to signs that Japanese investors are seeking foreign assets, which is seen as likely to weaken the currency. According to media reports, Meiji Yasuda Life Insurance Co. joined Nippon Life Insurance Co. in saying it may boost overseas investment as it seeks higher returns.
USDJPY traded in the same range as the Asian session, between 99.18 and 99.75 yen. The dollar dipped slightly after US core durable goods orders data fell more than expected, but USDJPY remained supported above 99.32 after the data. Focus turns to Friday’s Bank of Japan monetary policy meeting. If the central bank eases further, this will weaken the yen further.
EURJPY traded the European session between 128.79 129.78 yen.
The euro ended the European session flat, after recovering quickly from a brief sharp drop on the back of disappointing news from Germany’s IFO, showing a deterioration in business sentiment in Europe’s largest economy. The index printed at 104.4 versus 106.4 expected.
Helping support euro is the fact that Italian and Spanish debt is performing especially well over the past several days, with yields falling to quite low levels. Part of this is due to the fact that the election impasse in Italy has finally ended, with the appointment of a prime minister today. Enrico Letta, deputy secretary of Italy’s biggest political party, was designated prime minister.
Focus now turns to next Thursday’s ECB policy meeting, with rising expectations for an easing in monetary policy. Speculation is for a 25 basis point cut to bring the interest rate to 0.50 percent.
EURUSD opened in Europe at $1.3002, little changed for the Asian session range. After a brief dip to $1.2953 post German IFO data, the pair rose back to prior levels, going into the US session above $1.3000.
Sterling gained against the dollar in the Europe session, rising from $1.5248 to a high of $1.5286. Some gains were pared late in the session after disappointing UK retail sales data from the the London-based Confederation of British Industry (CBI) business lobby group . Annual sales growth fell to minus 1 from zero in March, the weakest reading in eight months. Economists had forecast an increase to 8 points.
Sterling is expected to be supported in the near term following yesterday’s announcement of changes to the Funding for Lending Scheme (FLS). The credit easing measures were improved and reduce the pressure on the Bank of England to provide monetary stimulus.
Yen remains weak due to signs that Japanese investors are seeking foreign assets, which is seen as likely to weaken the currency. According to media reports, Meiji Yasuda Life Insurance Co. joined Nippon Life Insurance Co. in saying it may boost overseas investment as it seeks higher returns.
USDJPY traded in the same range as the Asian session, between 99.18 and 99.75 yen. The dollar dipped slightly after US core durable goods orders data fell more than expected, but USDJPY remained supported above 99.32 after the data. Focus turns to Friday’s Bank of Japan monetary policy meeting. If the central bank eases further, this will weaken the yen further.
EURJPY traded the European session between 128.79 129.78 yen.
Related Posts: