3/4/2010 04:15 am: EUR/$..1.3660 $/JPY..88.33 GBP/$..1.5048 $/CHF..1.0711 AUD/$..0.9006 $/CAD..1.0309
Germany Not Convinced - USD Firmer by
Michael BoutrosAsian markets were sharply lower today after an uneasy US session yesterday, as investors are cautious ahead of the US jobs report tomorrow. Although the ADP employment report was in line with analyst forecasts, severe weather in the US in recent weeks is thought to have had a negative impact that may skew the report. In Europe, Greece announced another round of deficit cuts to the tune of 4.8 billion euros yesterday. Prime Minister George Papandreou has made it clear that Greece has "fulfilled to the utmost all that we must from our side; now it's Europe's turn." Although the ECB and other EU members have acknowledged Greece's decisive austerity measures, Germany, the unions largest economy, doesn't seem convinced the government has made enough reforms to address the underlying structural problems and meet its pledge to reduce the deficit to 8.7% of GDP this year. German Chancellor Angela Merkel has explicitly stated that tomorrow's meeting with the Greek Prime Minister will not be "about aid commitments, but about good relations between Germany and Greece." As investors wait to see how the sovereign debt crisis will play out, the Eurozone finds itself at a crossroad. Civil unrest continues to increase with additional strikes scheduled to be held in Greece and now in Portugal as well, as unions protest recent austerity measures taken by both governments. The question arises as to whether these countries can make the necessary changes needed to reduce their national deficits while attempting to appease the escalating tensions between the government and civil servants.
Euro Rally FadesThe euro was softer today having made advances against the greenback, lifting the single currency to 1.3736 at 11:30am in New York yesterday. The euro still faces considerable downward pressure although profit taking on record short positions have provided some interim strength for the currency. Support rests at 1.3630, followed by the 1.35 handle. Additional price floors are seen at 1.3460 and 1.3380. Advances past the 61.8% Fibonacci extension taken from the Dec 18th '08 and the Nov 25th '09 highs, at 1.3740, opens the door to modest gains, with targets at the 1.38 figure followed by 1.3830.
This article contains the following sections:
Euro Rally Fades
Dollar Bounces Back
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