Article by AlgosysFx Forex Trading Solutions
In the previous European trading session, the Euro gained versus the US dollar on news that Spain is already getting ready to ask for financial assistance from the Euro Zone’s bailout fund. In today’s European trading exchanges, the shared currency is projected to further drop versus the Dollar as Spanish Prime Minister Mariano Rajoy denied emerging reports that Madrid is getting ready for a bailout request.
Yesterday, Rajoy said that a bailout request is not imminent, and that the central government has agreed with the regional leaders over fiscal consolidation. Uncertainties over the timing of the request are becoming the markets’ primary concern. A request for bailout is seen as positive for Spain and the Euro Zone as it would activate the new bond-buying program of the European Central Bank to lower borrowing costs. Today’s release of the Retail Sales data is likely to weigh on the shared currency as August’s print is expected to decline by 0.1 percent, from the previous month’s reading of 0.2 percent. The ECB officials are set to meet tomorrow, and are expected to keep interest rates at 0.75 percent.
Until Spain requests for financial aid, the Buck is seen to strengthen versus the shared currency as demand for safer assets is likely to increase. Thus, a short position for the Euro-Dollar pair is recommended in today’s trading exchanges.
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