Forex: Euro Struggles as Moody’s Downgrades Portugal

This morning the euro is under pressure after Moody’s downgraded Portugal’s credit and the rating of seven Hungarian banks. At the same time S&P analysts have stated that a rapid cut in Belgium’s sovereign debt pile is all but impossible due to the current political stalemate.

The reaction has been relatively muted though with Moody’s mostly formalising analysis already out there in the forex markets. The EUR/USD is down 0.14%, though the EUR/CHF is weaker, down 0.23%.

Elsewhere in the spread betting markets, the AUD/USD is down 0.30% after the RBA elected to keep rates on hold at 4.75%. In addition the Australian trade balance came in lower than expected at -0.21bn.

The NZD/USD is holding up well though after bullish comments from the New Zealand finance minister.

In other markets, gold is positioned just below the $1440 level, which appears to be acting as a resistance zone for now. Brent crude oil prices hit $121 yesterday helping to boost currencies with exposure to North Sea oil such as the British pound. The GBP/JPY is the morning’s top mover, up 0.40%

Coming up today we have UK Services PMI due at 09.30 London with an increase of 0.1% on the cards.

US ISM Non Manufacturing PMI follows at 15.00 with a slight increase to 59.80 expected. At 19.00 we have the release of the minutes from the last FOMC meeting with FOMC member Plosser speaking before this at 16.15 London.

 

Fixed Odds Trade Idea – EUR/USD:

  Yesterday the EUR/USD closed within its tightest range for over 10 sessions, a situation that can often lead to volatility rebounds.

One way to play this, might be an IN/OUT trade predicting that the EUR/USD will close outside of either 1.4100 or 1.4325 in 2 days time (April 7th) for a potential return of 120%. You will lose 100% of your stake if your trade is unsuccessful.

 

How the Spread Betting Markets Looked Yesterday Afternoon (16.15):

  Yesterday afternoon, forex markets were decidedly mixed with the general theme being the strength in the Japanese yen, after selling off consistently since the post Tsunami lows in March. The biggest moves were against the Australian dollar which was particularly weak yesterday, with the AUD/JPY setting up for its first down day since March 16th (as of 16.15).

The other main commodity currency, the Canadian dollar, was also selling off after a downbeat business conditions survey from the Bank of Canada. The USD/CAD was up 0.40% (as of 16.15).

 

Spread Betting and CFD trading carry a high level of risk to your capital and you can lose more than your initial deposit. These trading products may not be suitable for all investors so seek independent advice if necessary.

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April 2, 2011 • Tags: Portugal • Posted in: Sport Betting Reviews

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