This is a review of the elements likely to affect foreign exchange
(forex) trading in the European session:
Spain Downgraded to One Level Above Junk by S&P on Risks - Bloomberg
Dollar Index Reaches Month High After Spain Downgrade - Bloomberg
Lagarde: Greece Needs More Time to Meet Targets - Bloomberg
US economy growing modestly, Fed report suggests - Reuters
Japan finmin: Yen
rise doesn't reflect fundamentals - Reuters
As Democrats cry foul, "Moderate Mitt" rises in polls - Reuters
Romney Closes In on Obama in 3 Swing States: NBC-WSJ Poll - CNBC
Policy Makers Bemoan Currency Strength as Yellen Defends Fed - Bloomberg
Fed's Fisher says US must tackle fiscal cliff to spur hiring - Reuters
Keep low interest rates unless jobless rate falls: SF Fed chief - Reuters
Goldman Sachs's Cohn Sees Pain When Fed Ends Quantitative Easing - Bloomberg
US sets steep final duties on Chinese solar panels - Reuters
Brazil Signals Interest Rates to Stay at Record for Long Period - Bloomberg
Asia Stocks Swing Between Gains, Losses as Utilities Rise - Bloomberg
Big China Stimulus? Not Until Growth Drops Below 7% - CNBC
China May Pass Japan as World's Second Wealthiest by 2017 - Bloomberg
Yuan hits record high as PBOC signals tolerance of appreciation - Reuters
Yuan Strengthens Beyond 6.28 a Dollar for First Time Since 1993 - Bloomberg
Noda Calls for China Talks as Island Spat Threatens Growth - Bloomberg
Australia Adds More Workers as Unemployment Hits 2 1/2-Year - Bloomberg
Australians World's Wealthiest on Housing: Credit Suisse - Bloomberg
South Korea cuts rates to boost faltering growth - FT
Hewlett-Packard's Reign as Top PC Maker Ended by Lenovo - Bloomberg
ING Agrees to Sell Malaysia Unit to AIA for $1.7B - Bloomberg
Dubai Losing Billions as Expats Send Pay - Bloomberg
Will S&P Ratings Cut Finally Push Spain Into a Bailout? - CNBC
Volatility expected after Spanish downgrade - FT
Spanish, French Leaders Urge Quick Bank Action - WSJ
Italy set to ease austerity with tax cuts - FT
Denmark Tries to Crack Open Its Door - WSJ
Albania Nearer to EU Membership - WSJ
Political backlash over BAE deal- FT
EUR: The euro cross-rates move sideways after consolidating during the last few trading days. As expected, S&P cut Spain's sovereign rating one notch above junk status. Some pundits say that this move could trigger Spain asking for a bailout. The rating agency says Spain faces growing economic and political risks. EUR-USD is pivoting in the 1.2850 area. The next support zone is found at 1.2800. We see the formation of a batman technical pattern. EUR-JPY holds above 100.
GBP: The sterling crosses are trading sideways as well. Cable trades a tad above 1.6000 while GBP-JPY is close to 125.00. EUR-GBP is moving close to 0.8040. Recent remarks by the BOE governor still reverberate. King signalled that inflation is not their primary focus.
CHF: The Swiss franc firms a bit after recent losses. EUR-CHF trades close to 1.2080. The SNB president said yesterday that they are still determined to defend the 1.20 floor. Meanwhile USD-CHF is below but close to 0.9400.
Nordics: The Swedish krona shows some signs of strength after good industrial production numbers. The Norwegian kroner is more subdued. Brent is hovering near $115, it is $5 below recent levels. EUR-SEK trades close to 8.65 and EUR-NOK is still below 7.40.
USD & JPY: The US dollar
and the Japanese yen are still in demand under a risk-on/ risk-off context. The Dollar Index has reached a month high after Spain's downgrade by S&P. Yesterday we produced a bullish strategy in the DXY that seems to be paying-off. The latest Fed's Beige Book underlines that the US economy is growing modestly. Today we have more action in the macro calendar that could affect USD trading.
CAD, AUD & NZD: The three dollars advance lead by the Aussie that wears off mixed employment figures in Australia. AUD-USD is still trading between 1.02 and 1.03.