Forex Intraday Round-up: The British Pound Retraces Losses
**The Single Currency Mixed Ahead of Eurogroup Meeting**
The euro has been mixed today against the dollar, reaching a session high of 1.2986 before falling back to below 1.2970. At 12.20 GMT the EUR/USD was changing at 1.2966/67, the same levels as its Friday close. Despite that analysts believe the overall mood is bullish and the pair is looking to extend gains seen last week. Forex markets participants are largely focused on the meeting of Eurogroup’s finance ministers, who are still struggling to agree on Greece’s future.
“Markets seem to have fully priced in a deal getting done today, but we worry that they could be disappointed, as we’ve seen reports that the decision on Greece could get pushed back to the Eurogroup meeting on 3 Dec, as there is still a big gap in opinions to bridge”, wrote TD Securities analyst Jacqui Douglas as quoted by FXstreet.com. He also pointed out that if there is no deal on delivering the much needed Greek bailout, the EUR/USD could slip well below its current levels.
French Minister Pierre Moscovici said late Sunday that “it would be irresponsible not to reach an accord given all the efforts that have been made on all sides,” This is the third Eurogroup meeting on which finance ministers are attempting to agree on a deal. If they are successful the EUR/USD is expected to clear the 1.2989 level and head towards the 1.3000 barrier. From there on resistance is seen at 1.3020 and 1.3070.
**The Sterling Fails to Rise Against the Greenback**
The pound slipped from a three-week high against the US dollar and remained little changed against the euro. “For today the pound will just be driven by euro-group chatter this morning and any fiscal-cliff headlines this afternoon as talks start in earnest,” said Christian Lawrence, currency strategist at Radobank International.
!m[The Euro Remains Mixed, While Indonesia’s Rupiah Climbs Most in Ten-Weeks](/uploads/story/898/thumbs/pic1_inline.png)At 12.40 the GBP/USD was trading around 1.6008/09 or 0.15 percent lower than its last close. It reached a daily low of 1.6002, where it received enough support to rebound a little. If Europe’s finance ministers come closer to a deal today, the UK currency is expected to gain against the dollar and weaken versus the euro. According to Radobank’s forecast provided by Bloomberg, the British pound will strengthen to $1.65 in the next half year.
No other significant announcements are expected today apart from the German Consumer Confidence index, estimated by analysts at 6.2. Vitor Constancio, Vice President of the European Central Bank (ECB), commented today that the inflation risks in the Eurozone are well contained, the ECB expects Spain to apply for the OMT packages soon and there is no indication that any country will exit the single currency bloc.
**The Indonesian Rupiah Climbs Most in Ten Weeks**
Bloomberg reported that Indonesia’s rupiah advanced most in ten weeks on speculation that the country recorded a trade surplus in October. Indonesia registered two consecutive trade surpluses in August and September, following four months of deficit. The October data is expected to be released on 3 December.US figures by the National Retail Federation showing that consumers spent 13 percent more during the Thanksgiving period compared to a year earlier also gave a boost to more risky assets.
“The market has turned risk-on again following positive data from the U.S.,” said Bayu Kurniawan, a foreign-exchange trader at PT Bank Ekonomi Raharja in Jakarta, a unit of HSBC Holdings Plc. “We expect the trade balance to be positive in October as global conditions steadily improve.