Market Review – 29/04/2010 21:30GMT
Euro strengthens on optimism for Greek aid and upbeat Germany data
Euro advanced on Thursday on optimism that Greece might receive a bailout which could worth 100 billion to 120 billion euros over three years, which would be larger than previously expected as Greece’s Prime Minister George Papandreou is willing to cut the government’s budget deficits by persuading labor unions to accept austerity measures. Fall in Germany unemployment rate also lifted the single currency.
Euro rebounded on Thursday following Wednesday’s fall to 1-year low of 1.3114 in the previous trading session. Price rose from 1.3184 to 1.3279 in European mid-day after the leader of Germany’s largest opposition party said it was ready to allow Greek aid decision before May 9, easing worries that Greece might not get aid in time to finance its debt. However, the single currency retreated later as details of the Greece package remained uncertain. In other news, Economic and Monetary Affairs Commissioner Olli Rehn said the European Union should complete talks with Greece ‘within days’ on a financial aid package.
Although the British pound briefly dipped to 1.5142, the pair swiftly rebounded from there and rallied to 1.5342 on cross buying on sterling especially versus the single currency (eur/gbp tumbled fm 0.8734 to 0.8631) in NY afternoon as two polls both signalled Conservative leader Cameron would win, opening chance for his party to win a straight majority in the General Election. Cable also drew support from larger-than-expected rise for British April house prices, which came in at 1.0% m/m and 10.5% y/y versus the forecast of 0.3% m/m and 9.7% y/y respectively. In addition, firmness in US and European stocks also improved market sentiment which gave support to cable.
On economic front, New Zealand March trade balance reached 567.0 M (nzd) against forecast of 380.0 M while German unemployment rate unexpectedly fell to 7.8% in April (forecast was 8.0%) from the previous reading of 8.0% and the unemployment change was -68.0K, much lower than the forecast of -10.0K.
Economic data to be released on Friday include: U.K. Gfk survey, Japan household spending, CPI, industrial production, housing start, unemployment rate, construction orders, E.U. HICP flash, unemployment rate, Swiss KOF indicator, U.S. PCE, GDP deflator, Chicago PMI, Canada GDP and PPI.
http://www.acetraderfx.com