Markets Find Footing After Portugal Downgrade

Today’s session in Asia saw the Euro begin its climb out of earlier lows that were instigated by the downgrade of Portugal to junk status by the Moody’s rating agency. After posting a low just under the 1.4400 big figure in late New York trading, the single European unit continued its slow trek higher to eventual highs near 1.4465 after an open close to 1.4425. The action was quite scarce today with a lack of any top tier data and almost no news crossing the wires. The day was reduced to watching the risk currencies take back a little bit of turf after the losses suffered by the news on Portugal’s debt downgrade and new fears that a second bailout may be in the cards for the nation. While profit taking was paramount to the days moves, higher precious metals helped to loft risk currencies, most notably the Aussie and Kiwi dollars.

The AUD/USD added 50 pips to 1.0730 with the expectations that tomorrow’s employment data will be better than anticipated. The NZD/USD grew from 0.8255 to 0.8300 with the vital GDP data looming on the calendar for tomorrow. Both pairs were aided by gold, XAU/USD, comfortably trading near $1516.00 highs and silver near two week highs The yen crosses were jerked around a bit, but ultimately remained unchanged on the day. USD/JPY slipped to 80.80 on a 30 pip drop, but overall the yen remained quiet.

With a deluge of top tier data in the picture tomorrow many traders will be positioning themselves for the potential action. We’ll start Thursday’s Asian session off with New Zealand GDP, move to Aussie employment data and then be greeted by rate decisions by both the ECB and BOE in early London.

Source: Forex.com

06.07.2011