MORNING BRIEFING: Euro falls, US Dollar Rallies on Greek concerns

[RTFX-Trading]

MORNING BRIEFING: Euro falls, US Dollar Rallies on Greek concerns

What’s new:
Global: G20 Meet today
European Union: Eurostat revises initial estimates for Greek debt load
Moody’s: Cuts rating on Greek Government Debt
Euro zone: Euro still falling
IMF: Stronger Yuan could help solve global trade imbalances
United States: Data shows United States is on the path to recovery

Today:



Overnight Rates and Indices:
EURUSD: 1.3296 – 1.3201.
USDCHF: 1.0850 – 1.0778.
GBPUSD: 1.5399 – 1.5316.
EURJPY: 124.27 – 123.41.
USDJPY: 93.63 – 93.31.
DowJones: 11’134.29 +0.08%
NASDAQ: 2’519.07 +0.58%
S&P 500: 1’208.67 +0.23%
Nikkei: 10’914.46 -0.32%.
Shanghai: 2’983.56 -0.53%,
Gold: $1’141.10
Crude Oil: $83.45
 
Comments:

G20 meet today hoping to plot a course beyond the financial crisis, talks likely to focus on regulating banks, rebalancing global growth and giving fast-growing emerging economies more clout -  but Greek’s alarming deficit, and Thursday revision of debt load figures will serve as a reminder of how the global economy remains frail.

The Chinese Yuan is also expected to generate talk in the G20, as world leaders try to address imbalances in world economy the Yuan is being criticized for being undervalued and many are pointing to a stronger Yuan as one of several measures to help fix global trade imbalances -  United States is the loudest to criticize but also IMF Chief, Brazil’s Central Bank governor and also Japan (although in a more reserved manner)  amongst others.

In Asian trading the Euro fell to its lowest in a year, as speculation heightened that Greece could default on its debt obligations. Against the US Dollar the Euro dropped as low as 1.3201. Euro is being beaten down as Greek concerns intensify and fears of contagion rise. Moody’s cut its rating on Greek Government Debt and European Union said country’s budget deficit was worse than feared.

Greek problems are attracting more demand for the ‘safe haven’ Dollar. United States’ Job & Home sales data reinforced the view that the US economy is on a path to recovery, and this further supported the US Dollar. Against the yen the dollar remained quite steady in the 93.40 region.

Good Day.

Rudolf Muscat
Trading desk

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