Opened at $1.3185 after being ground down in NY on downgrade announcements from Fitch and S&P of Spanish banks, and dwindling optimism over Greece as ECB’s Nowotny warned that more had to be done if Greece was to meet its austerity measures. The Eurogroup is also now set to decide on the Greek package as a whole including the PSI. Asia opened to further rating news from Moody’s that 9 european sovereigns would be adjusted, including France, Austria and the UK whose ratings were put on a “negative”outlook. Downgrades were applied to Spain, Portugal, Italy, Slovakia, Slovenia and Malta. Euro fell through stops at $1.3180 and $1.3150 on sales from Russian and momentum names despite demand from an Asian sovereign. The move stalled eventually at $1.3145 after meeting some strong demand from a UK clearer and recovered to $1.3175 but remains under pressure ahead of the european open. Key support is now seen towards $1.3140 with a break there pointing down to $1.3025. Focus this morning will be on the EU IP and EU/German ZEW data at 1000GMT.
EasyForexNews Research Team