Investors faith in Europe overrides disappointment
As news broke of Europe’s failure to agree on Greece’s bailout, the euro took a sharp fall. This however was not to last as it appears a foregone conclusion that the troubled nation will receive financing, the only detail remaining is when.
Recovering from its fall, the euro rallied back to make gains against almost all of its major counterparts. The gains could look to continue in the days that approach too, as the markets price in the virtual certainty that the third tranche of bailout funds will be released.
Across the pond, the dollar has seen deterioration as investors look to riskier assets. It looks to be easier than anticipated to avert US from the danger of plunging from the fiscal cliff. Congress seems to be cooperating well as America tries to avoid the scheduled austerity, which is promoting confidence in economies further afield.
As America celebrates Thanksgiving, if fiscal cliff progress can continue in the same vein, remarkably without snafu, then it should continue to spur interest beyond the safety of the greenback.
Similarly if investors’ current belief in euro zone leaders persists, the euro could see extended strength into the coming weeks. For those looking to buy euros, transacting now rather than later could prove beneficial for the responsive.
Today’s Key Announcements:
- 08.00am – EUR – French Manufacturing PMI: slightly improved at 44.7
- 08.00am – EUR – French Services PMI: slightly improved at 46.1
- 08.30am – EUR – German Manufacturing PMI: improved at 46.8
- 08.30am – EUR – German Services PMI: slightly down at 48.0
- 09.00am – EUR – Euro Manufacturing PMI: up at 46.2
- 09.00am – EUR – Euro Services PMI: down at 45.7
- All Day – EUR – EU Economic Summit
- Tentative – EUR – Spanish 10y Bond Auction
- 11.00am – GBP – CBI Industrial Order Expectations
See previous Daily Market Reports