ForexLive European Wrap: Dark clouds gather over the German economy

Author: Pete Jackson | Category: News

Europe opened with a mildly positive tone following a stronger Australian CPI  and HSBC PMI release, but early gains in European equities were soon reversed on the release of weak German PMI and IFO data .

The German PMI led a sharp drop in EUR/USD from the low 1.2990’s to  around 1.2960, but the move never had a chance to bounce before the IFO figure sent the EUR into a tailspin to lows of 1.2920.

Attempts at a bounce initiated by some Asian demand failed to break back up much through 1.2940 and the pair remains under pressure ahead of the NY open.

Equities were initially slammed on the PMI/IFO with IBEX and FTSE MIB down around 1% but the moved quickly reversed with  the majority now all back in the black.

EUR/GBP was hit hard from the off, a UK clearer leading a dawn raid on the cable with a spike to 1.6000 from  1.5950, sending the cross sharply lower from  0.8140. The German data did the rest as stops were tripped down through the 200 day MA at 0.8108 to session lows of 0.8086. Cable has remained range bound and presently sits just under 1.6000.

USD/JPY is still facing a tough climb towards 80.00 with exporters stacking up offers up to 80.10, but  reasonable support remains in the 79.60/70 zone which held the USD firm whilst EUR/JPY was  scythed down from 103.77 to 102.99.

December WTI crude fell over a $1 to lows around 82.25, Gold was steady for most of the morning a few $’s either side of $1710


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