Share this
Twitter
Myspace
Mister Wong
Digg
Del.icio.us
Slashdot
Furl
Yahoo
Newsvine
Googlize this
Blinklist
Facebook
Wikio
Hear this text
Export PDF
Print
E-mail
Tags
The British Pound Holds Firm As European Leaders Discuss Greece's Debt Woes
The British pound stayed firm versus a struggling euro on Monday, as perceived sovereign risk in the euro zone weighed on sentiment towards the single European currency. Worries over Greece's debts outweighed concerns about the UK economy and its currency, as a lack of clarity over a support package for Athens and persistent investor anxiety regarding the indebtedness of other peripheral euro zone countries kept the single European currency under pressure. Trade was light on Monday as Presidents' Day holiday in the U.S. reduced liquidity which had already been impacted by lunar New Year holidays in much of Asia.
This week's focus will be on BoE minutes, due on Wednesday after Governor Mervyn King said last week it was far too soon to say quantitative easing was finished. 'The MPC minutes may show that a significant minority voted for an extension of QE, perhaps including Governor King,' said analysts at Barclays in a note. The GBP/USD is currently trading at $1.5660 as of 20:04pm, GMT, with a bullish trend.
The euro may fall by 1.6 percent in the near term before gaining ground again, according to Societe Generale SA, citing trading patterns. The euro, which has lost 5.2 percent against the dollar this year, may drop to $1.3485 initially or to the 'lower end of the tentative declining channel' at $1.3390, said Hugues Naka, a technical analyst at SocGen in Paris. The bottom of that channel 'should contain any move below the long-term Fibonacci retracement at $1.3485 and force the euro to head north again,' Naka wrote in an e-mailed note. Resistance levels, where sell orders may be grouped, include $1.3635, $1.3695 and $1.3800, according to the bank. Fibonacci retracement levels refer to a series of numbers known as the Fibonacci sequence that are used by technical analysts to identify support and resistance based on retracements of past price changes. The EUR/USD is currently trading at $1.3600 as of 20:38pm, GMT, with a bearish trend.
Canada's dollar fell as China raised reserve requirements, discouraging demand for currencies related to economic growth. 'There's a little bit of risk off,' said Steve Butler, director of foreign-exchange trading in Toronto at Bank of Nova Scotia, Canada's third-largest lender. China's decision to slow lending has 'a lot to do with it,' he said. The market is still unsettled about Greece,' Butler said. 'Until we get a better sense of what they want to do and whether they can handle the spill-over effects, the market will continue to have an unsettled feel about it.' The USD/CAD is currently trading at $1.0489 as of 21:00pm, GMT, with a bullish trend.
Finotec Group Inc.
http://www.finotec.com/
Disclaimer: FINOTEC Tradings Market Commentaries are provided for informational purposes only. The information contained within these reports is gathered from reputable news sources and not intended as investment advice. FINOTEC Trading assumes no responsibility or liability from gains or losses incurred by the information herein.
