Ex Greek PM Papademos Rattles the euro
City Index May 23, 2012 1:00 PM
<p>Ex Greek PM Papademos Rattles the euro. Euro crushed late in NY session after Ex Greek PM Papademos warned that “risk of Greece leaving Euro […]</p>
Ex Greek PM Papademos Rattles the euro. Euro crushed late in NY session after Ex Greek PM Papademos warned that “risk of Greece leaving Euro is real”. Although denials came later that Greece leaving euro is unlikely to materialize.
Range: 1.2646 – 1.2685
Euro-dollar closed in NY at 1.2685 after rate was pressured to late lows of 1.2658 as market reacted to ex-Greek PM Papademos that Greek EMU exit plans were being considered. Rate held above 1.2680 into early Asian trading before dropping to 1.2648 on reaction to reported comments from CIC Chairman Jin Liqun that eurozone leaders should stop wasting time. Dollar-yuan fixed higher prompted another round of general dollar demand which dropped euro-dollar to session lows of 1.26432. The rate then recovered, aided by Papademos denials in a CNBC interview of earlier reported comments, adding that Greece leaving euro unlikely to materialize. The rate edged to early session highs at 1.2685, opening Europe around 1.2674. Bids remain in place to 1.2643 with stops below, a break to open a move toward 1.2624 though option interest at 1.2625 expected to be protected.
Range: 1.5743 – 1.5766
Cable closed in NY at 1.5766 off late session lows at 1.5743 after rate tracked euro-dollar’s negative reaction to ex-Greek PM comments. The move lower was tempered by euro-sterling extending its corrective pullback off earlier highs of 0.8102 to 0.8042. Cable continued to take direction from euro-dollar, the rate moving down from early posted session highs of 1.5771 to retest NY lows at 1.5743. The rate recovered to 1.5767, opening Europe around 1.5750. Euro-sterling’s extended ease to 0.8032 in Asia provided cable with some underlying buoyancy, though tone remains heavy. Cable bids into 1.5740, stronger between 1.5735-1.5730. Offers 1.5780-1.5785.
Range: 1,556.26 – 1,567.58
Gold prices were undermined yesterday by a weak euro and a lack of buying interest ahead of the European Union Summit scheduled for today with overall sentiment towards the euro remains bearish and most European Union officials have tended to downplay the prospects for meaningful progress or agreement at the Summit. Expectations for the outcome of the Summit remain subdued. Surging Indian scrap market could reduce demand for imported gold with a commensurate impact on prices. Support now seen at 1,553.95, followed by 1,541.36 and then 1,517.82, resistance looks at 1,574.33, 1,586.93, and a move higher at 1,594.71.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.