Market Review May 9 2012

May 9 • Market Reviews • 5633 Views • 2 Comments on Market Review May 9 2012

Economic Events for May 9, 2012 for the European and US Markets

Today’s eco calendar is virtually bear, with only some local and regional released, which will not have any market affects. The main events coming up are begin on the 10th, when things begin to get exciting. We will see lots of data from China, the UK and the US.

Today’s Fx markets will be a Three Ring Circus. In the main ring we will see Greece, followed closed by France and not to be left out the clown car with Merkel, Lagarde and the ECB bunch.

We should see the euro hold at its current level, or perhaps watch the USD lose some of its strength. I do believe that we have several speeches coming from Fed Reserve members this evening.


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Euro Dollar
EURUSD (1.2970)
The euro is extremely weak, having lost 0.35% against the USD, and below the psychological 1.30 level. Portuguese and Greek 10‐year yields are rising rapidly, with both up over 30bpts today and Greek yields at post‐default high. The dollar rose Tuesday, extending its longest string of daily gains since 2008, as investors sought a safe haven amid worries both about Greece’s potential exit from the euro zone and the health of Spain’s banks.

The Sterling Pound
GBPUSD (1.6133)
Sterling hovered within sight of a 3-1/2 year peak against the euro on Tuesday as political uncertainty in Greece cast doubt on the viability of austerity plans aimed at tackling the euro zone debt crisis.

But sterling may come under pressure if debt contagion and economic slowdown in the euro zone started to affect the UK economy and fuel speculation the Bank of England could extend its asset purchase programme to boost growth.

Asian –Pacific Currency
USDJPY (79.75)
The yen continued to maintain strength as investors sought a safe haven. The moves were cautious as the BoJ has warned speculators to stay away or they would intervene. The safe haven yen was steady to firmer. The dollar held steady at 79.85 yen. The Australian dollar dipped below 80.40 yen at one point, and fell to its lowest level since January.

Gold (1604.35)
moved downward from the opening of the US session on.  Rising worries over upholding austerity measures in the Euro zone by the newly elected governments of France and Greece weighed on both the Euro and spot gold too. Euro ended lower against dollar extending its previous session’s losses. However potential demand from India, the world’s top consumer of gold, and China may offer some support. Yesterday, Government of India has decided to withdraw the proposal of imposing an excise duty on gold jewellery forced in March. In addition to this, Hong Kong’s shipments of gold to China have posted a rise of 59 percent in March.

Crude Oil
Crude Oil (96.57)
Nymex crude oil prices slipped more than 1 percent today on the back of expected rise in US crude oil inventories which are at highest level in 21 years. Additionally, a stronger dollar index and rising worries over Europe’s debt crisis also led further downside in oil prices.  Crude oil touched an intra-day low of $ 96.40/bbl and hovered at $ 96.83/bbl today. On the MCX, oil prices declined by 0.4 percent.

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to increase by 2.0 million barrels for the week ending on 4th May 2012.

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