MORNING BRIEFING: New low in fourteen months for the Euro against USD

[RTFX-Trading]

MORNING BRIEFING: New low in fourteen months for the Euro against USD

What’s new :
United States: Today retail sales figures
United States: Fears for the stability of the Euro from Paul Volcker
Great Britain: Historical Low for GBP against the former colonies!
Euro: Lowest in fourteen months
Germany: Deutsche Bank's CEO has doubts about Greece’s repayment ability  
Portugal: Announcement of higher taxes and lower wages, following the example of Spain
Forex: Market quiet Thursday with a majority of financial markets closed

Today:


Rates in Asia and Indices:
EURUSD: 1.2558 - 1.2516.
USDCHF: 1.1193 - 1.1153.
GBPUSD: 1.4639 - 1.4573.
EURJPY: 116.69 – 115.87.
USDJPY: 92.94 – 92.50.
DowJones: 10’782.95 -1.05%
NASDAQ: 2'394.36 -1.21%
S & P 500: 1'157.44 -1.21%
Nikkei: 10'530.71 -0.85%
Shanghai 2'703.76 -0.25%  
Gold: $ 1'235.90
Crude Oil: $ 79.92

Comments:
The publication at 14.30 CET of the US monthly statistics of retail sales, expected at 0.2%, will be followed closely by the markets, domestic consumption beeing currently the main driver of the U.S. economy. While in London, Paul Volcker, former head of the Federal Reserve and economic adviser to the White House, expressed his doubts about the sustainability of the euro, saying that excessive borrowing by European governments and the lack of a single government for the Europe undermine the single currency.

The pound sterling, still weakened by the public debt and weak economic recovery, reached yesterday historical lows at 1.4836 against CAD, 1,6222 against AUD and 2.0389 against NZD. For its part, the new coalition government, to underscore the need for stringent measures to consolidate public finances, has announced a cut and a freeze for 5 years of its salary. This has not prevented the emergence of divisions within the same new government, bad point for the pound sterling!

With the closure of many financial centers and in a flat market, the euro reached last night a new 14-month low against USD at 1.2516. Despite some places still closed today, we could see the psychological support of 1.25 against the USD and 1.40 against CHF tested before the weekend.

In a talk show on German TV channel ZDF, Jo Ackerman, CEO of Deutsche Bank, has expressed doubts about Greece's ability to repay its debts, while stressing that the economic situation of Europe was better than United States or Great Britain, and a weak euro would benefit Germany, given the weight of exports for the German economy.

Following the example of Spain the day before, in turn yesterday Portugal announced reductions in spending, with lower wages in the public domain and higher taxes.

Have a good day

Pascal Bovay

RTFX Ltd
Trading desk
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