The EU Moves To Aid Greece - The Currency Market Impact
After a quick attempt to push lower, the major currencies turned around and recovered the pips lost earlier in the day to the Usd. The moves were in-line with the EU announcing a tangible recovery package to finance Greek debt, and finally admitting that direct aid would have to be given.
S/P futures traders also reacted well to the setting of Libor and the fixing of oil and gold prices in London, and the move to test 1152 resistance was enough to instigate a rally of automated short Usd orders that swept up all before it.
These intraday moves, that cannot break the previous session ranges, are part of the general re-alignment ahead in reaction to news reports, with another to come at 14:15 ET with the FOMC U.S. rate statement.
European Economics:
The overnight European economic releases (pre-Greek debt restructuring) showed no positive signals for the economic outlook, with the exception of one that historically garners no interest at all.The Department of Communities and Local Government (DCLG) House Price Index printed at +6.2%, which was double the expected read.
That seemed to be enough, when added to the S/P jaunt higher, to instigate a round of automated orders that reversed Gbp/Usd off the lows of the session.The two interest rate decisions today from the FOMC and the BoJ have the potential to form major swing points for the value of the Usd and for the Jpy.
The dollar index has been moving around the 80.00 area since early February, without any solid direction. If in any way, the Fed hints at higher interest rates to come, the dollar index is likely to make a huge leap forward, possibly towards the 85.00 area.
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