EU Morning Report- Euro slides on Greek uncertainty
|Written by Easy-Forex|
|Wednesday, 09 May 2012 06:59 GMT|
The euro (EUR) fell below the 1.30 level against the dollar sliding as low as 1.2965 from 1.3059 as political uncertainty in Greece continues to weigh on market sentiment. Greece’s Left Coalition party leader Tsipras, who is expected to form a new coalition government, warned yesterday that the country’s commitment to a European Union/International Monetary Fund rescue plan had become null and void. His statement raised fears about the country’s ability to avoid bankruptcy and stay in the eurozone as Greece needs to follow the necessary austerity measures in order to receive the next bailout money. World equities tumbled yesterday as the political uncertainty is causing a broader retreat from risky assets. Also, German Industrial Production figures were released yesterday, which showed an unexpected jump by 2.8%, the biggest rise since July 2011.
The US dollar (USD) strengthened against a basket of currencies yesterday on a heightened risk aversion in the market. Against the safe haven Japanese yen (JPY) the greenback fell to 79.70 from 80.07 and in the absence of an intervention by the Bank of Japan, the yen may remain strong as the political uncertainty in the eurozone resumes.
The Australian dollar (AUD) plummeted against the dollar to 1.0053 from 1.0216, a 1.6% decline. Economic data further weighed on the Aussie after figures showed Australia’s economy recorded its third-straight trade deficit in March. This was lower than expected and it was due to declining exports of coal and iron while imports of crude oil jumped. While the Prime Minister Julia Gillard’s plan is to return to a budget surplus, investors are concerned that the central bank may need to ease its monetary policy further. The Reserve Bank of Australia remains worried over the subdued housing market, slow growth, economic conditions in the eurozone, as well as an economic slowdown in the country’s largest trade partner, China.
Oil edged lower to 95.51 dollars a barrel from 97.93. Gold (XAU) slid to 1586.49 dollars an ounce from 1638.25 and against the euro it edged lower to 1234.34 euro an ounce from 1255.48. Silver (XAG) dropped to 28.89 dollars an ounce from 30.06. Stay in tune throughout the day with !
1 data generated by Trading Central™, 2 data obtained from easy-forex Inside Viewer™
3 at the time of writing