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HISTORICAL DETAILS
% Change
1 Wk -1.00%
1 Month 1.50%
3 Months 4.56%
6 Months 8.92%
1 Year 1.67%
52 WEEK
High 1.4282
Low 1.1877
BLOOMBERG MEDIAN FORECASTS
Q1 2011 1.35
Q2 2011 1.34
Q3 2011 1.35
Q4 2011 1.35
DAILY DETAIL
A downgrade to Spain’s sovereign debt rating struck the euro this morning, sending the common currency sharply lower against the US dollar. Moody’s Investors Service downgraded Spain’s rating by one notch to Aa2 as the rating agency believes the costs associated with restructuring the country’s banking system will be a burden on the economy. The downgrade this morning is the third reminder this week that problems exist in the peripheral European economies. Moody’s also downgraded Greece’s debt rating by three notches to B1 on Monday, while yields on Portuguese 10-year bonds rose to a record on Wednesday. Further contributing to the euro’s decline this morning was weak trade data from China. Exports from the world’s growth engine only rose 2.4% in February, whereas economists were projecting a 27.1% increase; the shortfall suggests global demand for Chinese products may be waning. Imports were also below expectations at 19.4%. The outlook for the euro looks to be tied to the downside as investors await details of the EU’s ‘comprehensive plan’ to contain the region’s debt problems at the end of the month. The planned stress test for the region’s banks may also fail to demonstrate the robustness of the financial system, as countries will be able to choose their own Tier 1 capital ratio for the test. The US dollar has also been broadly gaining this week as the US economy continues to show improving fundamentals, which may limit any major gains in the euro. This afternoon’s US weekly jobless claims data may give the US dollar a further boost if the numbers are near or less than expectations. David Choe, London
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