Monday 16th January, 2012 Foreign Exchange News
FX analysts are predicting that there will not be much time left for the dust to settle following the mass Standard and Poor rating cut of 9 Euro zone countries. The bloc leaders now face the real possibility of Greece being the first to default on its debt following the collapse of talks between Greece and IIF over the coupon on replacement bonds. It looks like it is going to be a very interesting and monumental week with the interbank market getting louder and louder that a return to Drachma is imminent.
The YEN has resumed its appreciation against the greenback after the improvement in the Consumer Confidence index to 38.9 in December from 38.1 and the 0.1% increase in the Domestic Corporate Goods PI MoM in the same period.
On Friday Barrack Obama formally notified the congress that US government needs to borrow another $1.2 trillion to meet existing commitments. Congress should vote during the next 15 days on the approval of the proposal that may raise debt ceiling to about 16.4 trillion. The government was near default in 2011 exceeding its debt ceiling.
The AUD/USD has seen the Australian dollar trading near a range of 1.0250/10300 range so far this Monday, last quoted near the Asian open, around 1.0280.
The outlook for the EUR/USD will remain negative as long as a cluster of resistances at 1.2913/20 stays in place. As we write the pair is moving towards 1.2530/88.
The EUR/USD has risen ahead of the French debt auction trading at 1.2672. Markets will be eyeing the sovereign sale to understand the repercussions of the one notch downgrade by the S & P rating agency.
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