Closed in NY at $1.2915 after rate had bounced back from initial Spain Budget react lows of $1.2829 to $1.2928 as market perceived that the austerity measures announced would leave open the door to Spain asking for bond buy aid from the ECB without further austerity requirements. Attention however now turns to today’s Spain bank risk assessment with most expecting to gauge reaction on a E60bln capital shortfall. A slow opening in Asia saw rate trade restricted to $1.2910/20 before rate marked lows at $1.2908 and bounced. US name demand provided the initial lift, with two European names then cited for extending the recovery to $1.29425, tripping some minor stops placed above the NY high at $1.2928. Rate found support at that NY high before settling around $1.2935 into Europe. Offers are reported to begin from above $1.2950, with stops placed on a break of $1.2955, though a move above here to meet further sell interest into $1.2975. Support seen back at $1.2910/00. Apart from Spanish bank stress test results market will watch Germany Ifo (0800GMT) with a possible Moody’s Spain review due.
EasyForexNews Research Team