Euro retreated against the dollar on the forex market

The Euro retreated against the dollar still on the forex exchange market this afternoon, a sign that fears of sovereign spread of the crisis do not improve. At this time, the euro lost 0.16% against the dollar at 1.3504 dollar the euro. A low of 1.3429 was marked this morning.

Not much new in Europe, where the policy of the ECB’s sovereign debt and the means of EFSF leave investors in the dark. And after Italy, market attention is also focused on France.

“The spreads (spreads) between German and French rates to 10 years were at their highest level since the creation of the euro (at 190 basis points),” remind traders of Pictet & Cie about meeting yesterday. The widening gap in the performance of state funds equivalent in France and Germany reflects rising investor concerns about the financial situation not only of Italy but also France.

At this time, the 10-year Bund reported 1.78% and the equivalent French OAT 3.66%, a spread of 1.88 basis point. Little improvement to report in that direction.

The “10 years” of Spain and Italy are respectively more than 6.3% and 7%. No release of pressure on that side either. The euro also lost 0.58% against the yen to 103.7, 0.14% against the pound at 0.8542 and 0.16% against the Swiss franc to 1.2372.

Statistics on the agenda of the morning, it was reported that the inflation rate reached 3% in the euro area from a year earlier in October, a rate unchanged from September, according to figures released Wednesday by Eurostat . The Statistical Office of the European Union states that monthly rate, that is to say, a month to month, the monthly inflation rate in the 17 countries in the region stood at 0.3 % in October.

Euro Technical Levels Review Of Last Week

The courses of the single currency resumed Thursday on the height expectations for release of the situation in Italy. But the meltdown of the day paved the way for a return of the lowest in October.

At 3:00 p.m. Thursday, the euro rose 0.8% to 1.363 against the dollar. The single currency was driven by expectations of unblocking the situation in Italy. Berlusconi said Thursday its support for the former European Commissioner Mario Monti, tipped to succeed him as head of the executive. At this announcement, the yield of the loan Italian relaxed a bit after a record high the previous day to about 7.4%. The rebound of the euro, however, appears very pale after the downfall of the previous day. The courses have indeed fallen by more than 2%. The trend is now clearly bearish in the short to medium term. In the short term, a major graphics support was broken. An admission of weakness that makes the threat of a return on the lowest from October to 1.316, ie, the current prices, a 3.7% gap. We remain negative below 1.387. In the medium term, parity is a vast third of the entire cycle of decline triggered the end of August. The downward trend started on October 28 should be of a magnitude less than that recorded between August 30 and October 4, about 10%. This would bring parity in its January low of around 1.29. Below, we would aim 1.262.

Recovery Against The Major Forex Is Underway

The single European currency resumed Thursday afternoon after recent days against the backdrop of Italian sovereign crisis. Around 12:30, the euro and gained 0.44% against the USD to 1.3584, after bottoming at 1.3484 this morning. It was the first time in a month that the currency drove the dollar threshold of 1.35 euro.

A recovery is also observed against the pound sterling (+ 0.31% to 0.8530). However, the calm side of the yen (- 0.01% to 105.4) and the Swiss franc (- 0.07% to 1.2304).

Some relaxation has occurred in the last 24 hours on the interest rates of Italian state funds to 10 years, income to 7% after a 7.5% pric close yesterday afternoon. Which indicates an attenuation of concern about the situation of sovereign countries.

‘The President of the Italian Senate announced that he would ask senators to pass the law on financial stability by the end of the week to reassure the markets’ traders refer to Pictet & Cie. This law should be passed by the lower house by the end of the month, then the current Chairman Silvio Berlusconi, denied an absolute majority, should resign, according to the current schema.

“With 1,600 billion euros, the Italian debt surpasses that of Spain, Portugal and Ireland combined” recalls Fabrice Cousté, CEO of CMC Markets France. Or also, “the country needs to refinance 37 billion euros until the end of the year and 307 billion euros in 2012. With an average cost to 4.15% of its existing debt, the interest alone already amounted to 12.7 billion. With a rate of 7%, the debt burden becomes heavier 8.7 billion, “he calculates

According to CMC Markets France, the European Central Bank is only able to contain the fire. The establishment of Frankfurt could increase the pace of its purchases of Italian bonds, which are not unanimously this summer and were conducted at a rate of 7 billion euros a week.

“It will be the first step towards a debt monetization European situation so far always refused categorically by Jean-Claude Trichet and Germany,” says Fabrice Cousté. “The sooner the better.”

Natixis, it seems somewhat agree “given the relative importance of the Italian debt, a credit event of the sovereign would mean the end of the euro. The risk is therefore more specific. It is strongly systemic. This is why the ECB plays an increasing role in this crisis. It has no choice but to buy the Italian debt, even if it is not its role. Taking sovereign risk to their account and inflating its balance sheet (which is objectively nothing serious), it empowers the banking sector to the (good) risk elsewhere and to support real economy, “said a research note signed by the Director of Economic Research, Philippe Waechter.

But at the same time, the establishment of a national unity government wades in Greece against the backdrop of disagreements among stakeholders. And it could be the same in Italy, after the departure of “Cavaliere”.

In addition, “some official statements are far from reassuring ‘, says Aurel BGC. “Uncertainties about the future status and role of the EFSF do not encourage investors, particularly Asian, to lend. The latest issue of the EFSF went wrong with a rise in long rates. If even the EFSF can borrow at low rates, the credibility of the rescue of the Euro zone is questioned, “analysts fear.

In addition, since the IMF, ‘Lagarde, Executive Director of the IMF, urged Asian economies to take steps to guard against the impact of a recession’, also show specialists.