Euro rebounds to 1.3760 at the European morning session - 2nd November, Forex Trading Update

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by: fxsolutions
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Date: Wed, 9 Nov 2011 Time: 11:30 AM
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Chris Advincula, Market Analyst at FX Solutions (http://www.fxsolutions.com/), provides Forex traders with an overview of currency market activity and news on 2nd November 2011, including news around the Euro.

"The euro rose to a slow and grinding recovery to the 1.3790 resistance level during the opening hours of the European session from the Asian session low of 1.3635 (+155-pips).
Sterling rose 105-pips to 1.6020, the Australian Dollar gained 140-pips.

A glimmer of hope came from the positive comments from the German Finance Minister, Wolfgang Schauble saying that the eurozone will support the Greeks provided to their compliance to the terms of the new EU bailout plan agreement, and also from the Chinese Vice-Minister Li Yong who said that China will work with the EU leaders to help cope with the EU debt crisis, lent momentary support to the euro and other currencies with the risk appetite resumption including the European equities.

The rebound and durability of the risk rally is questionable which appears to have been led more by shortcovering of the market rather than this bit of vague or unsubstantiated news, with the unstable conditions of both Greece and even Italy are proving to be the key source of market concerns.

The tainted picture of the peripheral bond spreads of the 10-year bonds between Italy and the German bunds for instance, rose a disturbing 95 basis points from the former levels when only a week ago, is suggestive of the rising yields on the Italian bonds are drawing out both real money or capital away from Italy as the bonds are sold.

Today, we will see the Greek Prime Minister, George Papandreou who was summoned by the EU leaders to an emergency meeting just a day before the G20 meeting scheduled for Nov 3-4.

George Papandreou has single-handedly placed Greek's 6th tranche of rescue funds of 8 billion Euros in serious jeopardy where the IMF is yet to approve with his irresponsible and reckless call to a Greek Referendum, without regard to the enormous implications to both the eurozone and the financial markets.

Japanese stocks fell for a third day. Nikkei fell 2.21% to 8,640.42.
European stocks opened higher. Euro Stoxx rose 1.09%, FTSE rose 0.51%, DAX rose 1.40% CAC rose 1.46%."

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