adminWe are already seeing the euro trade sideways against its mainstream trade partners as that jobless rate rose by 11,1 percent in May from 11 percent in April.
With the European Central Bank meeting set for tomorrow the euro could come under immense pressure.
Market watchers are predicting a rate cut by 25 basis points to 0,75 meaning a reduction in the yield for the euro and dollar strength.
The single-currency was trading fell by 0,7 percent against the euro to trade at US$1,2578 per-euro and fell by 1 percent against the yen to 100,07 yen.
The Japanese currency advanced 0,5 percent to 79,50 to the dollar. Whatever the European Central Bank decides to do this week could support market risk sentiment while adding to the cyclical winds for the euro.
For a while till June 29 we saw a bounce in the euro but that rally has fizzled as the market adjusted to the real thing.
The euro-dollar currency pair has been so sensitive to headlines from Europe. As Europe’s crisis persists we are likely to see a prolonged stay for the bears in the market meaning volatility will definitely have investors wary of financial losses on their portfolios.
The market has seen wealth preservation opportunities decline depriving investors of their selection pattern.
Austerity measures are good for the ratings, but in the markets eyes they are also undermining the growth outlook. In London, the sterling pound rose by 0,6 percent to US$1,5699 per dollar and rose by 0,8 percent against the euro to 80,15 pence per euro.
The sterling pound was facing resistance at US$1,5699 per dollar and will likely breakout to US$1,5710 per dollar as that rally is being driven by those Bank of England ahead.
As the European debt crisis persists and the Federal Reserve keeps its rate lower near zero there will be demand for sterling pound.
For most of the traders and investors they have been closely monitoring the sterling pound-euro pair (GBP/EUR) as we keep seeing money leave the euro on haven concern.
The current swings in the GBP/EUR have boosted sterling demand. We are likely to see the sterling pound strengthen to 80,00 pence per-euro given those European upheavals.
In Switzerland, the Swiss franc has been boosted by financial turmoil in the region as that risk rally faded.
The Swiss franc also pared gains against the dollar and euro as haven demand increases.
The Swiss franc rose by 0,4 percent against the dollar to 95,45 US cents and was little changed against the euro at 1,2008.
In Australia, the Aussie dollar was boosted by news that the Reserve Bank of Australia will leave rates unchanged in their meeting this week. The Aussie dollar rose slightly to US$1,0249 against the dollar.
South African Markets
The rand rose by 2 percent to trade at R8,1523 per dollar as risk appetite continues to perform. Risk-on trade ahead of that European Central Bank meeting will support the rand as they seek to boost growth and that rate cut will support rand movement.
Commodity markets
Gold was little changed at US$1 597,60 an ounce and looks likely to touch US$1 615 an ounce supported by that European Central Bank meeting as they look forward to loosening their monetary policy.
Bullion will remain supported by a slew of central bank meetings and those non-farm payrolls due this week.
Crude oil declined by 1,6 percent on European reaction, Iran risk premium and Opec output.
On Iran, the tensions between the West and Iran as the ban on Iranian oil will bring fluctuations on oil prices and Opec cutting down on supplies will dictate oil prices going forward.
At the moment it’s the fundamentals and supply issues both driving oil prices. Crude oil touched US$83,63 per barrel on supply issues.
The US market will be closed today for their Independence holiday. Good day.
Online Reporter