Forex Intraday Round-up: Euro Falls from Three-Week High

on Nov 27, 2012
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**The Euro Weakens On Uncertainty of Greek Bonds Buyback**

After breaking the psychological barrier of $1.3000, the euro fell sharply against the US dollar on concern that Greece won’t be able to buy back its bonds as agreed by Eurozone finance ministers, which means the bailout funds might once again be withheld. At 12.00 GMT the EUR/USD was in negative territory changing at 1.2949/50 or 0.17 percent lower than yesterday, after having reached a session high of 1.3010.

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“There is uncertainty regarding the debt buyback,” opined Gavin Friend, a currency strategist at National Australia Bank, as quoted by Bloomberg. “It looks as though Greece wants to pursue a buyback at some point between now and Dec. 13. We don’t quite know how much that’s going to contribute and it looks as though the IMF is saying part of the deal is contingent upon the success of that buyback.”

On the technical side, the morning rally in the EUR/USD led to a serious profit taking, which was still ongoing at 11.40 GMT. According to Commerzbank analyst Karen Jones, the pair is likely to recover its gains and fall in the vicinity of 1.3037 and 1.3075.
**The US Dollar Strengthens on Criticism of US Quantitative Easing**
The US dollar managed to recover some of its losses from yesterday and last week after Federal Reserve Bank of Dallas Richard Fisher voiced concerns at a conference in Berlin about the Fed’s quantitative easing programme. He said that some boundaries should be placed on the US’ quantitative easing as the same accommodative policies cannot be maintained forever. The comments from Mr Fisher helped the dollar index, measuring the strength of the greenback against a basket of rival currencies, recoup losses and trade flat at 80.250, up from a four-week low of 80.022.

**The Sterling Gains After Positive GDP Data and New BoE Governor Announcement**
!m[The Sterling and the US Dollar Advance in Midday Forex Trading](/uploads/story/906/thumbs/pic1_inline.png)At 12.40 GMT the GBP/USD is trading in positive territory at 1.6034/37 after reaching a session high of 1.6054. The sterling also advanced against the euro with the EUR/GBP changing at .8084/85 or 0.09 lower than yesterday.

Helped by the strongest household spending in two years, UK’s revised GDP growth remained unchanged at 1 percent in line with October estimates. With its third-quarter growth the UK was able to put an end to the double-dip recession although many sceptics pointed out that the Q3 GDP growth was boosted by one-time events such as the Olympics and the recovery from the Diamond Jubilee holiday in Q2.
Bank of England (BoE) Governor Mervyn King said today he is confident in Chancellor George Osborne decision to appoint Mark Carney, the current governor of the Bank of Canada and former managing director at Goldman Sachs, as the next BoE governor. “I think anyone who holds down a job like mine wants very much on the day when they leave, to hand the Bank on to someone who they know will carry on the good work, and I am completely confident with Mark Carney as someone with whom the Bank is in very good hands – as indeed is the role of governor which I am sure he will carry out with very great distinction.” Mr King said.

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