Daily Archives: February 20, 2012
UBS Morning Adviser America
Euro Marches Higher The euro grinded higher in the European session as Eurozone finance ministers meet at today’s Eurogroup summit. Risk assets were well bid with the euro leading the way higher and the Antipodes benefitting from China’s unexpected weekend decision to cut the reserve ratio requirement by 50 bp.
EUR/USD Analysis
EUR/USD closed in NY Friday at $1.3140 with rate marked up to $1.3170 into early Asian trade Monday on the positive outlook regarding today’s Eurogroup meeting on Greece, as well as China cutting it’s RRR by 50bps, adding to the risk on tone.
GBP Analysis
Cable closed in NY Friday at $1.5835, marked lows into early Asia Monday at $1.5834 before pushing higher, the rate tracking EUR/USD early move up with ‘risk on’ trade seen prompted by an expected positive outcome from today’s Eurogroup meeting, concerning Greek debt aid, as well as the weekend cut in China’s RRR by 50bps.
JPY Analysis
Opened with a small gap higher in Asia around Y79.60 as risk appetite returned with positive Greek bailout news expected and Saturday’s RRR cut from the PBOC. Importer demand triggered stops and along with strong euro-yen macro demand, took the pair to highs of Y79.89 before encountering exporter offers.
Behavioral Finance: Daily Forex Outlook: China and Japan offer eurozone support via IMF
EUR USD (1.3210) Japan and China have showed joint interest in expanding the IMF resources to address the eurozone crisis provided the European members work towards lifting the €500 billion cap on the rescue vehicle, the ESM.
FX Daily Strategist: Europe
Expectations build for a deal – but we’ve been here before The Eurozone developments over the weekend have raised expectations of a deal from today’s Eurogroup, due to kick off at 3.30pm Brussels time. German Finance Minister Schaeuble’s comments were seen as less combative;
Technical Analysis
EURUSD grinding higher but with poor momentum. Short term no strong directional conviction, EURJPY today’s gap and spike to be monitored very close as possible ending the upside correction, EURSEK rejected from 8.8520 but a new attempt will emerge from 8.80/82,
AUD/USD Analysis
Opened in Asia with a gap up at $1.0765 from the NY close of $1.710 following positive press regarding the EU Fin Min meeting today which is expected to approve the 2nd Greek bailout package.
Another Greek Week, but China hits headlines by easing policy
The surprise over the weekend came not from Greece, for a change, but from China, which announced a 50bp reduction in the Reserve Ratio Requirement for banks. This is expected to add some Yuan 360-400 bln of additional liquidity into the local banking system.
USD/JPY Analysis
Opened with a small gap higher in Asia at Y79.60 having closed last week around Y79.55 in NY. Risk appetite returned with the market now eyeing the Brussels meeting later today which is expected to agree the 2nd Greek bailout package.