MORNING BRIEFING: Euro down to four-year lows

[RTFX-Trading]

MORNING BRIEFING: Euro down to four-year lows

[B][U][I]What’s new:[/I][/U][/B]
Euro: Hits lows of 1.2234
US Dollar: Rises on ‘safe haven’ status
Japanese Yen: Rises on unwinding carry trades
British Pound: Possible cooling house prices, & ‘hidden’ spending commitments weigh on pound
China: Exports to Europe may suffer as Yuan rises about 14.5% against the Euro
[B][I][U]
Today:[/U][/I][/B]
[B][I][U]
[IMG]http://www.rtfx.com/images/news/CAL170510EN.gif[/IMG]

Rates in Asia and Indices: [/U][/I][/B]
EURUSD: 1.2373 - 1.2234.
USDCHF: 1.1447 - 1.1321.
GBPUSD: 1.4546 - 1.4252.
EURJPY: 114.27 – 112.47.
USDJPY: 92.41 – 91.76.
DowJones: 10’620.16 -1.51%
NASDAQ: 2'346.85 -1.98%
S & P 500: 1'135.68 -1.88%
Nikkei: 10’235.76 -2.17%
Shanghai 2’559.93 -5.07%
Gold: $ 1'236.70
Crude Oil: $ 70.18

[B][I][U]Comments:
[/U][/I][/B]
The US Dollar and Japanese Yen rally, as Gold rises too but stocks decline. Markets still concerned that Europe’s fiscal tightening will endanger a global economic recovery. Worries about European banks’ exposure to sovereign bonds keep lingering, this applies not only for Greek debt but also for other highly indebted euro zone nations.

Euro falls to four year lows. Friday’s sell-off was partly prompted by rumours that France had threatened to pull out of the euro zone if Germany did not back the rescue plan (however these rumours were refuted by Sarkozy).

The British Pound suffered downward pressure on data suggesting that British house prices may be cooling. Weighing on the pound was also criticism by Britiain’s new government of labour party’s previous fiscal policies, and comments that billions of pounds of previously hidden spending commitments were inherited by present Government.

The Yuan’s strong appreciation against the euro will have a negative impact on China’s exports to European countries, an official from the Ministry of Commerce reportedly said on Monday.

With an uneventful economic calendar today, one is to expect that risk sentiment will remain the primary driver of price action.

Good day,


Rudolf Muscat
Trading desk

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