- Reports over the weekend that Germany would demand strict austerity measures for Greece before any aid package was approved; EUR/USD opened 50 pips weaker
- Lack of any action on Yuan over the weekend ensured further short-covering rallies on JPY crosses
- Regional stockmarkets rise by up to 2%
- Former IMF chief economist sees further bail-outs ahead for Europe
- Gold consolidates above $1150/oz
- Latest CFTC figures show USD speculative longs on the increase
- Australian financial markets closed for public holiday
EUR/USD opened 50 pips below it’s NY closing level from Friday of 1.3390. Once again the focus was on the German/Greek relationship. Shorts were relieved to get an opportunity to cover after Friday’s sharp rally and EUR/USD bounced quickly back to 1.3390 again. There are said to be heavy sell orders around 1.3400 and very large stop-losses just above. Range: 1.3318/97
Cable has remained quite firm throughout the session. The lack of any extremely negative headlines in the UK press will no doubt have helped. EUR/GBP slid 30 pips on the session as the focus remained on a nervy EUR. Ranges: 1.5374/1.5442, .8664/94.
USD/JPY fell immediately on the Tokyo open as a quick bout of profit taking went through but once the Nikkei started to rise, the JPY crosses rose also. Most of the focus was on AUD/JPY as it attempted to breach a multiple high at 87.50. It eventually succeeded only to fall back straight away. Corporate sell orders are reported from 94.50 through 80. Ranges: 93.93/94.35
The AUD/USD was quiet due to the local public holiday with the focus solely on AUD/JPY. Ranges: AUD/USD .9258/89, AUD/JPY 86.90/87.59.
Markets: Nikkei +2.2%, HK +1.7%, Kospi +1%. Gold +$5 at $1158/oz.
