Euro continues to suffer from significant selling pressures
The Euro has been the key loser today, losing 1.6 cents in trade today. Eurozone unemployment figures and GDP figures announced this morning have failed to support the flailing euro. the ECB Chancellor Jean Claude Trichet has said this afternoon that governments should not rely on the ECB for bail outs and that they should tighten fiscal policy to correct problems with their ever growing budget deficits.
Jean Claude Trichet stated “that monetary policy responsibility cannot substitute government irresponsibillity”. The fear of sovereign debt contagion is clearly still weighing heavily on the markets. Credit default swaps in Belgium and Ireland have reached new record high’s today as the euro comes under fire in the worse sell off we have seen so far this year.
Non Farm Payrolls today indicated that fewer than expected jobs were added. The expected figure was 150k with the actual figure coming in almost a third short at 103k. The main positive for the US economy is that the headline unemployment rate fell to 9.4% month on month versus the expected 9.7% figure.
The markets as expected have seen a considerable amount of volatillity today. The USD has suffered from weakness since the release of Non Farms yet there is a solid argument that perhaps the forecasted 150k was too optimistic and that the announced figure still indicates that the US economy is performing very well. We would expect the USD downward trend below the 1.55 pivot to continue into trade next week on this basis.
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Torfx Currency Dealer
â€œAny opinions expressed in this document are those of TorFX analysts. Any analysis and/or forecasts provided are aimed at helping clients understand market conditions and developing trends. Clients are wholly responsible for their own trading decisions.â€
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