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[AcetraderFX]

Market Review - 21/03/2012 19:34 All times in GMT

Euro surrenders gains on Spanish and Italian debt fears

The single currency touched its highest level since March 8 after Greek lawmakers officially passed a vote in support of the bailout deal which gives 172 billion euros in rescue loans in return for additional austerity measures. However these gains were sharply reversed on broad-based euro selling as debt concerns resurfaced leading to a jump in Spanish and Italian 10-year bond yields.

The euro initially extended Tuesday’s gains in early Asia touching a high of 1.3283 before trading narrowly for the rest of Asia. After briefly dipping to 1.3249 shortly after European open, buying interest there quickly lifted price to an intra-day high of 1.3286. Euro reversed its intra-day gains and fell to a low of 1.3212 in U.S. morning. Although price briefly recovered to 1.3257, the pair resumed its decline and hit a session low of 1.3178 before recovering.

The British pound tracked euro's move closely, ratcheting up from Asian open to a 2-week high of 1.5924 in the European morning on cross-buying of sterling versus euro & yen. Cable tanked after the release of dovish BoE minutes and a much larger-than-expected UK public sector net borrowing figure (Feb came in at 12.909 billion versus forecast of 5.2 billion), hitting a session low of 1.5817 before staging a minor recovery.

Versus the Japanese yen, after traded sideways in Asian session, the greenback rose above Tue's high of 83.83 in European morning and hit a session high of 84.10 ahead of New York opening. However, active cross-buying of yen (eur/yen tumbled from 111.43 to 110.05 after making a near 5-month high) sent the pair lower to 83.30 in New York afternoon before trading sideways.

On the data front, U.K March MPC voted unanimously to keep rates unchanged and they 7-2 voted to keep QE at 325 billion gbp; U.S. February existing home sales fell unexpectedly to 4.59 million from 4.63 million previously, lower than 4.62 million forecast.

Data to be released on Thursday:

New Zealand GDP, Japan Tankan manufacturing, exports, imports and trade balance, China HSBC manufacturing PMI, Swiss trade balance, German manufacturing and services PMI, Euro manufacturing PMI, services PMI, industrial orders and consumer confidence, U.K. retail sales, Canadian retail sales, U.S. jobless claims, house price index and leading indicators.

[Dominator4fx]

Market Review - 21/03/2012 19:34 All times in GMT

Euro surrenders gains on Spanish and Italian debt fears

The single currency touched its highest level since March 8 after Greek lawmakers officially passed a vote in support of the bailout deal which gives 172 billion euros in rescue loans in return for additional austerity measures. However these gains were sharply reversed on broad-based euro selling as debt concerns resurfaced leading to a jump in Spanish and Italian 10-year bond yields.

The euro initially extended Tuesday’s gains in early Asia touching a high of 1.3283 before trading narrowly for the rest of Asia. After briefly dipping to 1.3249 shortly after European open, buying interest there quickly lifted price to an intra-day high of 1.3286. Euro reversed its intra-day gains and fell to a low of 1.3212 in U.S. morning. Although price briefly recovered to 1.3257, the pair resumed its decline and hit a session low of 1.3178 before recovering.

The British pound tracked euro's move closely, ratcheting up from Asian open to a 2-week high of 1.5924 in the European morning on cross-buying of sterling versus euro & yen. Cable tanked after the release of dovish BoE minutes and a much larger-than-expected UK public sector net borrowing figure (Feb came in at 12.909 billion versus forecast of 5.2 billion), hitting a session low of 1.5817 before staging a minor recovery.

Versus the Japanese yen, after traded sideways in Asian session, the greenback rose above Tue's high of 83.83 in European morning and hit a session high of 84.10 ahead of New York opening. However, active cross-buying of yen (eur/yen tumbled from 111.43 to 110.05 after making a near 5-month high) sent the pair lower to 83.30 in New York afternoon before trading sideways.

On the data front, U.K March MPC voted unanimously to keep rates unchanged and they 7-2 voted to keep QE at 325 billion gbp; U.S. February existing home sales fell unexpectedly to 4.59 million from 4.63 million previously, lower than 4.62 million forecast.

Data to be released on Thursday:

New Zealand GDP, Japan Tankan manufacturing, exports, imports and trade balance, China HSBC manufacturing PMI, Swiss trade balance, German manufacturing and services PMI, Euro manufacturing PMI, services PMI, industrial orders and consumer confidence, U.K. retail sales, Canadian retail sales, U.S. jobless claims, house price index and leading indicators.

The problems of the Euro seem to be far from over with the fact that now after Greece it is the turn of the Euro to be looking for a support and bailout funds