The single currency slowly but surely closed the opening gap yesterday. But make no mistake, this does not mean that markets are ambivalent towards the fate of Greece; it’s more the nature of spot FX. Looking elsewhere, such as the FX options market, together with equities, peripheral bond markets (Spain, Italy) and also safe haven assets (e.g. German bonds), all the signs are that the concern remains. Today, Greece is expected not to repay the EUR 1.5bln owed to the IMF. This is not a default, in that it won’t trigger Greece’s credit rating moving to default status given that it’s not money owed on a bond, rather to an international institution. But it will be the first time a developed country has delayed a payment to the IMF, so it is remains pivotal moment in history.
Leaving aside Greece for the moment, we are in the last trading day of the month and quarter, so activity could be a little choppier than usual given the usual month and quarter end flows. The data calendar is relatively busy, with the release of final GDP data in the UK, together with various snippets of inflation data in the Eurozone, together with unemployment data. But these will be secondary to the overall market sentiment and flows, which makes directional moves that much harder to anticipate. We’re already seeing cable slightly offered at the start of European trading, down to the 1.57 level. In Asia, we’ve seen the Shanghai composite index recover, but volatility remains very high. The yen continues to stand out in this more risk averse environment, with no attempt to fill the opening gap lower on USDJPY yesterday. Yesterday, EURJPY saw the biggest one day range for more than 2 years (4th April 2013), but a much calmer tone is looking to prevail for the time being.
FxPro UK Limited is authorised and regulated by the Financial Services Authority, registration number 509956. CFDs are leveraged products that incur a high level of risk and it is possible to lose all your capital invested. Please ensure that you understand the risks involved and seek independent advice if necessary.
Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. FxPro does not take into account your personal investment objectives or financial situation. FxPro makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any employee of FxPro, a third party or otherwise. This material has not been prepared in accordance with legal requirements promoting the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and may not reflect the opinions of FxPro. This communication must not be reproduced or further distributed without the prior permission of FxPro. Risk Warning: CFDs, which are leveraged products, incur a high level of risk and can result in the loss of all your invested capital. Therefore, CFDs may not be suitable for all investors. You should not risk more than you are prepared to lose. Before deciding to trade, please ensure you understand the risks involved and take into account your level of experience. Seek independent advice if necessary. FxPro Financial Services Ltd is authorised and regulated by the CySEC (licence no. 078/07) and FxPro UK Limited is authorised and regulated by the Financial Services Authority, Number 509956.
Recommended Content
Editors’ Picks
EUR/USD extends gains above 1.0700, focus on key US data
EUR/USD meets fresh demand and rises toward 1.0750 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
US Q1 GDP Preview: Economic growth set to remain firm in, albeit easing from Q4
The United States Gross Domestic Product (GDP) is seen expanding at an annualized rate of 2.5% in Q1. The current resilience of the US economy bolsters the case for a soft landing.