Daily / Finance / forex / trading

S & P Downgrades Greece as Euro Slides

One Pound

Unlike last years speech by Bank of England Governor Mark Carney, the annual Mansion House dinner failed to move sterling one way or another. A slight move higher over the euro came really on the back off a sell off in the value of the single currency, with the dollar being the major benefactor, pushing cable lower. The GBP/USD pair is trading in the narrow band of 1.5480-1.55, after having faced rejection earlier today at 1.5530 levels. After posting gains for three consecutive sessions, the pair is having a breather ahead of the critical US data  – weekly jobless claims and monthly advance retail sales. A better than expected UK industrial production and fall in trade deficit helped the pair post gains in the previous two sessions. Meanwhile, cable could also be influenced by the market’s appetite for the US dollars, mainly influenced by the activity in German bond markets and EUR/USD pair. For those who follow technical levels, the immediate support is seen at 1.5439, under which the pair could target 1.5353 (200-DMA). On the flip side, a break above 1.55 could see the pair re-test 1.5551 levels.

euro

The Greek tragedy continues to play havoc with the euro as Greece’s Prime Minister Alexis Tsipras ended talks with key European leaders in Brussels Wednesday without achieving further progress towards reaching an agreement between his country and its international creditors. The meeting, which took place during the EU/Latin America Summit in the Belgian capital and included Germany’s Chancellor Angela Merkel and France’s President Francois Hollande, had been pushed for by the Greek Prime Minister in an effort to broker a political solution to the country’s impasse with the European Commission, the International Monetary Fund and the European Central Bank. We also saw the S & P downgrade Greece saying a default is likely if no debt deal is made. The single currency slipped close to a cent versus both the dollar and sterling.

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The dollar rallied yesterday as US and Asian stock markets rose sharply putting the Dow on track for its biggest one-day gain in a month. Gains were seen over the euro and sterling as cable dipped below the $1.54 handle. There was a slight fall against the Aussie dollar following a strong May jobs report. The Australia economy added 42,000 jobs (f/c. 15,000) which saw the unemployment rate fall to +6.0% (f/c. +6.2%). NZD/USD saw heavy losses after the RBNZ cut their official cash rate by 25 basis points to 3.25%. Governor Wheeler said further easing may be appropriate and the NZD remains overvalued & should fall further.

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