EUR/USD, GBP/USD, USD/JPY And AUD/USD : July 23, 2013 EUR/USD-Portugal Delivers Good News The Euro rallied against the greenback after the National Association of Realtors issued lackluster metrics which denoted a drop in U.S. Existing Home Sales for the month of June. The shared currency continued to strengthen after Portuguese President Cavaco Silva and Prime Minister Pedro Passos Coelho reiterated that the current government will remain in place, and it will stay committed to the terms of the bailout. Yields on Portugal’s 10-year bonds slipped to 6.4 percent after they reached 6.92 percent on Friday, when it appeared that the political deadlock threatened the nation’s EUR78 billion aid package. GBP/USD- Pound Rallies Over 100 Pips The British Pound sustained an increase of over 100 pips as risk appetite improved in the market following Portugal’s announcement, indicating the current government will stay in place at least until 2015. The economic calendar was light, but market investors anticipate that this week’s releases out of the U.K. will reveal economic growth in the second quarter of the year, a factor that contributed to the Sterling’s appreciation. And according to the British Prime Minister, should data remain consistent and indicate the economy is expanding, the government may consider cutting taxes, another element that bolstered the Pound’s strength versus most of its peers. USD/JPY-LDP Seals Victory The Liberal Democratic Party, the coalition of Prime Minister, Shinzo Abe along with its ally, the New Komeito secured the majority of seats in the Upper House, permitting them to have control over the two Houses. The news did not come as a surprise, but nonetheless prompted the Yen to snap three days of declines against the greenback. Throughout the weekend, the group of G-20 Finance Minister and central bankers concluded their summit in Moscow. They did not issue big announcements, but did suggest that the countries ought to retreat from monetary easing as it could prompt market volatility to reverse economic growth. XAU/USD-Housing Sends Gold Soaring Gold Futures increased on Monday, after the U.S. National Association of Realtors announced that Existing Homes Sales plunged 1.2 percent last month. While the figures revealed that the sector is indeed improving, they prompted investors to shy away from the greenback on speculation the Federal Reserve will continue with the current asset purchasing program. Gold prices were also supported as hedge funds increased speculation that gold would appreciate, causing the precious metal to sustain the biggest two-week advance. This means that gold prices have gained 6.7 percent, the most since fall of 2011. Analysts believe this occurred because Federal Reserve Chairman Ben Bernanke indicated that a reduction of bond purchases won’t happen for now. Gold Futures for delivery in August settled at $1,332.15 a troy ounce on the Comex Division of the New York Mercantile Exchange.
Posted on: Tue, 23 Jul 2013 08:17:09 +0000
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