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ForexLive US wrap: EUR/USD recovered European losses

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By: Jamie Coleman

Fed’s Bullard: Prefers Treasuries only portfolio at Fed; economy improving
ECB buys only EUR 124 mln in sovereign debt in latest week
North American FX turnover hit a record in October
Canada’s Ivey PMI rises to 64.1 in Janaury from 59.7 in December
Portugal denies seeking advisers for a potential debt restructuring
Portuguese PM says debt load is sustainable
Merkel: Cannot accept Greek bankruptcy; a second Greek bailout only if Greek finances made sustainable
Greek PM asks for report on ramifications of a Greek default 
Greek accepts demand for 15,000 public sector jobs
Fitch cuts Italian bank ratings 
Merkel and Sarkozy push for Greek to set up separate account for bond payments
Greek FinMin: EUR 600 mln in 2012 cuts still need to be agreed between Greece, Troika
SP 500 flat at 1344; Mi;an down 0.3%
US 10-year note yield down 2 bp to 1.90%; Italy at 5.63%
WTI falls 0.65 to $97.20; gold falls $6 to $1720

EUR/USD bounced from session lows of 1.3026 early in US trade and triggered stops above 1.3080 late in the London session, right after the 16:00 GMT fixing. The market got its self short on an intraday basis on the back of a negative outlook for the successful conclusion of long-delayed Greek debt talks.

One catalyst for the rally was comments by Merkel that she would not accept a Greek default, implying that another Greek bailout will get done, by hook or by crook. EUR/US rallied as high as 1.3140 on short-covering before stalling.

Heavy sales of USD/CHF were seen around the time of the EUR/USD spike. Additional sanctions from the US government toward Iran and its central bank may have been the catalyst for the USD/CHF sales.

AUD/USD consolidated above 1.0700 in quiet US afternoon trade ahead of tonight’s RBA meeting. A rate cut is a distinct possibility. Hourly uptrend support come sin about 1.0660 on dips.

Article source: http://www.fxstreet.com/news/forex-news/article.aspx?storyid=e561d142-3865-491a-9328-2836281848bd

<!–TITOL:

ForexLive US wrap: EUR/USD recovered European losses

FITITOL–>

By: Jamie Coleman

Fed’s Bullard: Prefers Treasuries only portfolio at Fed; economy improving
ECB buys only EUR 124 mln in sovereign debt in latest week
North American FX turnover hit a record in October
Canada’s Ivey PMI rises to 64.1 in Janaury from 59.7 in December
Portugal denies seeking advisers for a potential debt restructuring
Portuguese PM says debt load is sustainable
Merkel: Cannot accept Greek bankruptcy; a second Greek bailout only if Greek finances made sustainable
Greek PM asks for report on ramifications of a Greek default 
Greek accepts demand for 15,000 public sector jobs
Fitch cuts Italian bank ratings 
Merkel and Sarkozy push for Greek to set up separate account for bond payments
Greek FinMin: EUR 600 mln in 2012 cuts still need to be agreed between Greece, Troika
SP 500 flat at 1344; Mi;an down 0.3%
US 10-year note yield down 2 bp to 1.90%; Italy at 5.63%
WTI falls 0.65 to $97.20; gold falls $6 to $1720

EUR/USD bounced from session lows of 1.3026 early in US trade and triggered stops above 1.3080 late in the London session, right after the 16:00 GMT fixing. The market got its self short on an intraday basis on the back of a negative outlook for the successful conclusion of long-delayed Greek debt talks.

One catalyst for the rally was comments by Merkel that she would not accept a Greek default, implying that another Greek bailout will get done, by hook or by crook. EUR/US rallied as high as 1.3140 on short-covering before stalling.

Heavy sales of USD/CHF were seen around the time of the EUR/USD spike. Additional sanctions from the US government toward Iran and its central bank may have been the catalyst for the USD/CHF sales.

AUD/USD consolidated above 1.0700 in quiet US afternoon trade ahead of tonight’s RBA meeting. A rate cut is a distinct possibility. Hourly uptrend support come sin about 1.0660 on dips.

Article source: http://www.fxstreet.com/news/forex-news/article.aspx?storyid=e561d142-3865-491a-9328-2836281848bd

By Ian Chua

SYDNEY |
Mon Feb 6, 2012 6:21pm EST

SYDNEY (Reuters) – The euro held steady in Asia on Tuesday as markets remained sanguine that Greece will eventually clinch a rescue package, even as the country’s political leaders delayed their decision to accept painful terms by yet another day.

Failure to secure the 130 billion euro ($170 billion) rescue would risk pushing Athens into a chaotic debt default and destabilize the entire euro zone, an outcome deemed too extreme to contemplate.

That was seen keeping euro bears restrained for now at least, resulting in a volatile but resilient single currency. It stood at $1.3122 on Tuesday, little changed from late New York levels. A recovery from $1.3026 overnight kept the common currency within reach of a six-week peak around $1.3230 set last week.

Only a clear break of $1.3020 would see the euro move to $1.2930-50, the Jan 25 low and then to $1.2855-75 the 61.8 percent retracement of the $1.2624-1.3233 rally in January, traders said.

Still, without a clear outcome for Greece, the euro will remain choppy.

“The stalemate among the three political parties comes ahead of the April elections, implying that this in large part could be domestic politicking,” analysts at BNP Paribas wrote in a note. “As these talks continue, the euro will likely remain vulnerable to any headline risk.”

The euro’s resilience saw the dollar index .DXY retreat to 79.076, from a session high of 79.516, still uncomfortably close to an 8-week trough of 78.623 plumbed on Feb 1.

Against the yen, the dollar was steady at 76.55, taking a breather after creeping up from 76.20 on the back of upbeat U.S. jobs data last Friday.

Among commodity currencies, the Australian dollar is the one to watch ahead of the Reserve Bank of Australia’s (RBA) rate decision due at 0330 GMT. It stood at $1.0720, near a six-month peak set last week.

Interbank futures imply a 56 percent chance of a 25 basis point cut to the 4.25 percent cash rate, while many analysts polled by Reuters believe the RBA has room to cut given a benign inflation environment.

“The RBA may well take advantage of an overbought AUD/USD to squeeze it lower by proving more dovish than expected,” said Sebastien Galy, strategist at Societe Generale.

“The washout should be an opportunity to sell the downside in AUD/USD as it is likely to remain very much bid as a high yielding currency in an environment of extremely low yields and this in spite of deteriorating fundamentals.”

Should the RBA surprise by leaving rates unchanged, the Aussie could re-test Friday’s peak and then target the 29-year high of $1.1081 set in July.

(Additional reporting by Reuters FX analyst Krishna Kumar; Editing by Wayne Cole)

Article source: http://www.reuters.com/article/2012/02/06/us-markets-forex-idUSTRE80S0RY20120206

By Ian Chua

SYDNEY |
Mon Feb 6, 2012 6:21pm EST

SYDNEY (Reuters) – The euro held steady in Asia on Tuesday as markets remained sanguine that Greece will eventually clinch a rescue package, even as the country’s political leaders delayed their decision to accept painful terms by yet another day.

Failure to secure the 130 billion euro ($170 billion) rescue would risk pushing Athens into a chaotic debt default and destabilize the entire euro zone, an outcome deemed too extreme to contemplate.

That was seen keeping euro bears restrained for now at least, resulting in a volatile but resilient single currency. It stood at $1.3122 on Tuesday, little changed from late New York levels. A recovery from $1.3026 overnight kept the common currency within reach of a six-week peak around $1.3230 set last week.

Only a clear break of $1.3020 would see the euro move to $1.2930-50, the Jan 25 low and then to $1.2855-75 the 61.8 percent retracement of the $1.2624-1.3233 rally in January, traders said.

Still, without a clear outcome for Greece, the euro will remain choppy.

“The stalemate among the three political parties comes ahead of the April elections, implying that this in large part could be domestic politicking,” analysts at BNP Paribas wrote in a note. “As these talks continue, the euro will likely remain vulnerable to any headline risk.”

The euro’s resilience saw the dollar index .DXY retreat to 79.076, from a session high of 79.516, still uncomfortably close to an 8-week trough of 78.623 plumbed on Feb 1.

Against the yen, the dollar was steady at 76.55, taking a breather after creeping up from 76.20 on the back of upbeat U.S. jobs data last Friday.

Among commodity currencies, the Australian dollar is the one to watch ahead of the Reserve Bank of Australia’s (RBA) rate decision due at 0330 GMT. It stood at $1.0720, near a six-month peak set last week.

Interbank futures imply a 56 percent chance of a 25 basis point cut to the 4.25 percent cash rate, while many analysts polled by Reuters believe the RBA has room to cut given a benign inflation environment.

“The RBA may well take advantage of an overbought AUD/USD to squeeze it lower by proving more dovish than expected,” said Sebastien Galy, strategist at Societe Generale.

“The washout should be an opportunity to sell the downside in AUD/USD as it is likely to remain very much bid as a high yielding currency in an environment of extremely low yields and this in spite of deteriorating fundamentals.”

Should the RBA surprise by leaving rates unchanged, the Aussie could re-test Friday’s peak and then target the 29-year high of $1.1081 set in July.

(Additional reporting by Reuters FX analyst Krishna Kumar; Editing by Wayne Cole)

Article source: http://www.reuters.com/article/2012/02/06/us-markets-forex-idUSTRE80S0RY20120206

Talking Points

• Markets Positioned for Successful Greek Accord as Stock Index Futures Rise
• German Industrial Production May Surprise Higher After Pickup in PMI Data
• Australian Dollar Soars as RBA Unexpectedly Holds Interest Rates Unchanged

Most major currencies were little changed against the US Dollar (ticker: USDollar) in overnight trade as markets waited for clarity on the status of negotiations between Greece and the so-called “troika” of the ECB, the EU, and the IMF on the debt-strapped country’s second bailout package. The Australian Dollar outperformed after the Reserve Bank of Australia left benchmark interest rates unchanged at 4.25 percent, disappointing widespread expectations for a 25bps reduction.

Greek Prime Minister Lucas Papademos set a deadline of 10:00 GMT yesterday for ruling coalition party leaders to decide if they were prepared to signed on for more austerity – which the troika demands in exchange for an additional tranche of aid – to avert a default looming as soon as March 20 when €14.5 billion in debt is due to mature. That deadline passed and was extended seemingly without incident, but German Chancellor Angela Merkel and French President Nicolas Sarkozy ominously warned that “time was running out” and reiterated that no deal on additional funding would be possible without Athens’ assent the troika’s demands.

Greek labor unions are preparing to stage yet another strike as negotiations continue to drag on, adding to the tension quotient. Still, traders appear to believe that the potential consequences of a disorderly default will compel all parties to reach agreement before the point of no return. Indeed, European and US stock index futures are inching higher in late Asian hours, suggesting risk appetite is relatively well-supported. On the economic data front, German Industrial Production figures are in focus, with expectations calling for output to print flat in December, though a pickup in the more timely Manufacturing PMI reading over the same period suggests there may be room for an upside surprise.

Asia Session: What Happened

Euro Session: What to Expect

Critical Levels

— Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow me on Twitter at @IlyaSpivak

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Article source: http://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2012/02/07/FOREX_Euro_Major_Currencies_Still_Looking_to_Greece_for_Direction.html