By TraderVox.com
The Forex markets opened the week positive. All the news from last week was positive with global PMI and employment numbers coming out positive. The leader in the race was the US economy which showed an impressive Non-Farm Payrolls data bringing down the unemployment rate to 8.3%.This however did support the US dollar in the closing trades of last week and in this week’s opening moves.
But moving into this week the risk currencies moved into the bullish zone sending the Dollar Index lower. This was partly due to the past weeks positive data and rumors coming out that the Greeks are on the verge of an elusive deal with its debt holders. The Markets have given particular importance to these talks as the deadline set for Greece, which is 20th Feb, is fast approaching.
Another factor aiding the markets bullishness was the RBA rate decision. Most of the market participants had priced in a rate cut by the RBA. The RBA however surprised the markets by keeping the rates on hold. After the RBA minutes there was a bullish rally in the AUD, taking the currency to levels before the Greek tragedy began to grapple the markets i.e. the AUD rose to level of August 2011. Riding on the impressive AUD rally the GBP and the Euro also moved higher.
But today it seems that markets have lost its patience on Greece. The Greeks have been continuously testing the market patience with the slogan that a deal is nearing. A favorable outcome might be possible after the German and other European powers warning for Greece last week. But as time elapses speculations rise about the deal, fuelling negative sentiments for the Euro zone.
This is the factor for the selloff seen in the Euro, GBP, AUD, Gold and Silver the early US session today.
Another major fundamental is the dual rate decision in Europe tomorrow. Tomorrow there is the rate decision by the Bank of England and European Central Bank. The ECB outlook on the European economy is particularly important in the wake of the Greek situation. Back in England the BOE is expected to raise its asset purchase target by keeping the rates steady in an effort to fuel the slowing British economy.
Article provided TraderVox.com
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