Forex Intraday Round-Up: EUR Strong on Rumours of Greece Meeting Debt Targets

on Dec 11, 2012


The single currency remains strong against the greenback trading at 1.2988/92 in the intraday session or 0.38 percent higher than yesterday. The pair accelerated its march north after rumours were spread around the forex markets that Greece would meet its debt target of €30 billion (£24 billion). Sentiment has been boosted after the ZEW survey from the Eurozone showed better than expected results in Germany. Spanish auctions of 12-month and 18-month Letras have surpassed the initial target of €3.5 billion (£2.8 billion), posting lower yields and supporting the EUR/USD. According to the the pair will find resistance at 1.3087 followed by the psychological level of 1.3100 and then 1.3127 – the 5 December peak. If bearish, the EUR/USD should meet support at 1.2911, 1.2881 and the 7 December low of 1.2878.

At 12.30 GMT the GBP/USD was changing in positive territory at 1.6091/96 just below the 1.6100 mark. Yesterday Bank of England Governor Mervyn King spoke at an event organised by the Economic club of New York where he said that the Group of 20 nations must address the imbalances in the global economy or else countries may start using exchange rates as their main tool for monetary policy.

“My concern is that in 2013 we’ll see the growth of actively managed exchange rates as an alternative to the use of domestic monetary policy.” Mr King said as quoted by Bloomberg. He also added that the current account balances that helped spark the global recession remain an issue, which needs to be tackled.
!m[CHF Weakens After UBS and Credit Suisse Announce New Charge on Swiss franc Deposits](/uploads/story/1012/thumbs/pic1_inline.png)Mr King said the UK economy may improve in 2013 with the squeeze on consumers “should diminish” over the course of the year. “A reasonable central view would mean that we would expect to see some pick up in lending and investment, we would expect to see the squeeze on consumer spending ease somewhat. And we would hope that they might find some way of making the conditions in the euro area more conducive to an expansion of trade within Europe.”

The UBS strategy team are bullish on the GBP/USD and see resistances ahead at 1.6131. Above that there will be a run for 1.6175 and then 1.6217. Support for the pair is expected at 1.6003.
The Swiss franc lost ground to the euro today after UBS and Credit Suisse said they will charge bank clients for deposits they hold in Swiss francs. At 12.40 GMT the EUR/CHF was trading at 1.2109/11 after having reached an intraday high of 1.2129.

“Now that UBS are acting, other Swiss banks may take the measures,” said Eimear Daly, a currency-market analyst at Monex Europe. “It’s something that markets will be more conscious of. The franc is being pressed lower.”
According to Bloomberg UBS will start charging financial institutional clients for cash balances held in francs from 21 December. Switzerland’s biggest bank said it encourages its customers to keep as little of the country’s currency as possible and added that it will notify each client individually of the charge on his deposit.