Euro consolidates at 1.4190 level in early Europe - FX Solutions Market Update, 12th August 2011

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Date: Thu, 25 Aug 2011 Time: 9:31 AM
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Chris Advincula, Chief Market Analyst at FX Solutions (http://www.fxsolutions.com/), provides forex traders with an overview of currency market activity and news on 12th August 2011.

"France, Spain, Italy and Belgium will impose bans on naked short-selling in the equities market from today to stabilize the market after its turbulent decline in the past week.

The European Securities and Markets Authority said "While short-selling can be a valid trading strategy, when used in combination with spreading false market rumours this is clearly abusive". National regulators will impose the bans in the four countries.

The euro dollar came off from the 1.4250 level to 1.4170 on some rounds of profit-taking and modest buying of yen from 109.50 to 108.80. There have been some minor speculation that the ECB will cut its key interest rates soon and that the Greek GDP today will be -0.8% from +0.2% last month.

The dollar was range bound last night. French President Nicholas Sarkozy and German Chancellor Angela Merkel are scheduled to meet next Tuesday after the French banks were hammered this week. The EU commission is due to put forward ideas for a possible common euro zone bond issue in October. Strong opposition is expected from both the Bundesbank and German politicians.

China's Yuan fixed lower today at 6.3816 from yesterday's 6.3997 (-181 pips or -0.28%) on a similar 0.2% move by the PBOC to revalue they yuan. The China Securities Journal said that the dollar weakness is a high probability and a rising yuan will help to counter any associated inflation pressure.

Nikkei is -49.43 points to 8,932.51 (-0.55%)
Hang Seng +216.88 points to 19,812 (+1.11%)
S&P ASX is +30.60 points to 4,171.40 (+0.74%)
Shanghai is +13.53 points to 2,595.04 (+0.52%)

The 30-day exponential moving average eased from 1.4230 to 1.4190."

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