Intraday Market Thoughts

Euro Takes Out Highs, RBAs Stevens on the Sidelines

by Adam Button
Feb 23, 2012 23:41

The euro climbed to the highest since December and Greeces Parliament approved the PSI deal. The euro was the top performer while the US dollar lagged. RBA Governor Stevens delivered a speech early in Asia-Pacific trading that hinted at no forthcoming changes in rates.

The upbeat German IFO numbers and a broad move to sell the US dollar pushed the euro above 1.3350 in Thursdays US session. It looked as if the euro would be capped by sell orders at the European high of 1.3342 as sentiment deteriorated in early US trading but a late-day rebound pushed the euro into a new range.

The technical breakout in EUR/GBP above 0.8400 also continued to gain momentum, driving the pair to within a few pips of 0.8500.

Economic news continues to point to an improving US jobs picture as initial jobless claims registered 351K compared to the 351K expected.

Greece may begin its debt swap as soon as Friday after Parliament approved the deal. A hurdle for the bailout was placed by the IMF, which said it wants a larger firewall, or common rescue fund.

US dollar selling began after a strong 7-year auction pushed down yields and continued relentlessly with USD ending the day at the lows. Oil and gold took advantage of the dollar selling to push to new highs.

In Australia, Stevens said policy is about right for the moment and that he sees inflation close to target over the next two years, suggesting no rate cuts any time in the immediate future.

The only other event of the session comes at 2350 with the release of Japans corporate service price index expected at +0.1%.

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