Bad News All Around Europe

By TraderVox.com

The Euro started the week extremely strongly yesterday but just when we trying to analyze whether that strong start was due to continue, we saw a sharp turn of events as the Euro virtually lost all its hard fought gains of the morning. EUR/USD gained a massive 37 pips at the start of the day and this included the week starting with a gap. It shot up to a daily high of 1.3285 but then it took a sharp turn around midday and ended up closing at 1.3191, 19 pips away from opening price.

We know a lot of hearts get broken, especially with today being Valentine’s Day, when we start saying bad things about the Euro. The most significant event of the weekend was the Greek parliament deciding in favor of some new austerity measures which are built to aid Greece avoid default and consequently obtain another bailout. This new set of austerity measures was met with a lot of resistance as Greek citizens protested angrily against the decision yesterday outside the Greek parliament.

For those who are not verse with the Greek debt situation you will do well to know that if by March 20, the Greek government does not pay back its 14.5 Billion EUR bond debt, it will lead to default. So this debt deal has to be reached as soon as possible.

Elsewhere yesterday, there was bad news all around Europe as Moody downgraded debt ratings of some European countries. Italy, Portugal, Slovakia, Slovenia, Spain, Malta were among those that suffered. The UK, France and Austria did not receive any slack either as their credit outlook was reverted to a negative status. This does not bode well for the Euro at all and has consequently led to low market confidence and consequently risk aversion.

ZEW Survey data is due at 10.00 am GMT. The German and Euro zone specific reports are set to show better data than before though they are likely to stay in negative zone. Industrial Production data will also be released at same time.

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