Daily Market Brief

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By Daily Market Brief - Thu 12th Apr 2012

 

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After a difficult start to the week which saw the euro wobble amid renewed fears over Spanish and Italian debt, the euro is showing tentative signs of building some gains after a week of selling pressure. The Euro is still heavily under the spotlight as Spanish and Italian debt is still dangerously high, however sentiment that the ECB could resume bond buying has helped to ease fears. The Euro still remains pegged toward 1.31 against the USD and 1.30 remains a key support area for EUR/USD and given the consolidation at 1.31 we could see some recovery towards 1.3150 to 1.32.

The pound on the other hand is going from strength to strength and has hit a one year high on a trade weighted index- that is the pound as a measure against a basket of currencies.  The pound initially edged higher against the euro in line with euro concerns and improved economic numbers from the UK.  The pound however has not managed a sustained push higher against the euro. This suggests a lack of appetite to sell the euro too much as the market adopts a wait and see approach to the developments on Spain and Italy.

In other news the yen fell for a second day against the dollar and euro after Bank of Japan Governor Masaaki Shirakawa indicated further easing of monetary policy.  Later today we see further feedback from the US with initial jobless claims and the producer price index- with markets in risk off mode and following weaker than expected payroll numbers last week a good set of numbers is hoped for.