Euro Shows Resilience

The Euro found a bit of solid ground today in Asia which helped it recover recent losses and continue it gains from New York lows of 1.4120. The pair saw almost 45 pip gains to 1.4285 in Asia despite the continued wariness over the Euro Zone’s sovereign debt woes. Stops over 1.4250 helped grease the wheels of the EUR/USD move as traders seemed to be a bit more optimistic after EU finance ministers approved a loan package earlier in the day for Portugal. The question of a possible restructuring of Greece remains a thorn in the side for the EU and is sure to return to the center stage sooner than later.

In Australia, an initial drop of about 20 pips on worse than expected wage price data, 0.8% versus a forecast of 1.1%, brought the AUD/USD to lows near 1.0605. Those levels were quickly left behind as the pair shrugged off the data and tapped eventual highs over 1.0660. Further north, New Zealand saw favorable producer price data, (2.2% versus 0.9%) that pushed the currency to 0.7910 highs against the dollar for 60 pip gains. Commodity currencies also were boosted by firmer metal prices which saw a 50 cent increase in silver to $34.50 and a $7 move higher in gold to $1492.05.

Talk of M&A activity in Japan helped to firm the yen against the dollar and crosses, with USD/JPY dropping from 81.50 to a brief visit under 81.00 on the day. EUR/JPY faded from 116.40 to 115.70, while GBP/JPY slipped from 131.80 to 132.50 on the pretense of yen demand for a possible Toshiba buyout of a Swiss based company. Regional stocks were all firmer on the session with S&P futures higher heading into the next session.

Ahead in London we have some top tier data out of the UK with Claimant Count Change, MPC Meeting Minutes, and the Unemployment rate all just around the corner at 9:30GMT.

Source: Forex.com

18.05.2011