By Francisco Miñana
Date: Wednesday 04 Jul 2012
This is a foreign exchange (forex) market update at the European session pre-open.
IMF warns of ‘downside risks’ to US - FT
Draghi’s Giant Leap On Rates May Be Small Step For Euro - Bloomberg
Bank of England Implicated in LIBOR Row - Bloomberg
Barclays' Diamond Faces Grilling in Parliament - CNBC
Commodity-Currencies’ Forecasts for Year-End Are Reduced by Morgan Stanley - Bloomberg
Could Gold Hit $6000? Analyst Thinks So - Bloomberg
Dark economic clouds gather anew over Obama campaign - Reuters
US Needs to Deal With 'Fiscal Cliff' Soon: IMF's Lagarde - CNBC
Factory Orders Rise Three Times What Analysts Expected - CNBC
Canada Dollar Advances as Crude Oil Climbs, Risk-Asset Demand Increases - Bloomberg
Apple Plans Smaller IPad to Compete With Nexus - Bloomberg
Clinton’s ’Sorry’ Helps Reopen Pakistan Routes - Bloomberg
Mexico's president-elect may double security spending - Reuters
Peru clash over Newmont mine kills three - Reuters
Mexico's Slim not eyeing more Europe buys for now - Reuters
Asian Stocks, Korean Won Rise on Stimulus Hopes - Bloomberg
Australia Market Hits 7-Week High - WSJ
Yuan Advances on Growth Optimism as US Factory Orders Climb - Bloomberg
China Needs to Ease One-Child Policy - Bloomberg
Australia Retail Sales Rise More Than Forecast - Bloomberg
Reactor restarts, but Japan energy policy in flux - Reuters
Weak Rupee Forces Indians to Cut Back on Travel Plans - CNBC
Euro Options Show a Year More of Pain on Record Flow - Bloomberg
Diamond Exit Raises Speculation of Bank Split - Bloomberg
Martin Wolf: A Eurozone step in the right direction - FT
King Succession Race for BOE Roiled Over LIBOR - Bloomberg
Portugal PM tells unemployed to look abroad - FT
Spanish Aid May Flow Straight to Banks - WSJ
Iceland Minister Pushes for EU Entry - WSJ
EUR: The euro crosses trade sideways on the day before the long awaited European Central Bank (ECB) meeting in Frankfurt in which interest rates could be cut by 25 basis points. Yesterday’s production prices help the ECB to be more doveish in its monetary policy stance. We expect a close call between an interest rate reduction and no action. EUR-USD dips a little bit below 1.2600. EUR-JPY trades now at 100.35.
GBP: The sterling crosses follow the side steps of the euro. The Bank of England (BOE) is in the headlines amidst allegations of being implicated in the LIBOR scandal. Tomorrow the market expects that the Monetary Policy Committee could increase its asset purchase programme helping to restart the engines of a sluggish UK economy. Cable moves below 1.5700 resistance, while GBP-JPY trades under 125. EUR-GBP rises towards 0.8040.
CHF: Few changes in the Swiss trades despite reduced risk aversion in the Eurozone. EUR-CHF is in the familiar range close to the floor set at 1.2000 that the SNB is willing to defend. USD-CHF holds close to 0.9550.
CAD, AUD & NZD: The three dollars consolidate after reaching recent monthly highs against the USD and the JPY. AUD-USD retraces after testing the 1.03 resistance zone. Meanwhile, USD-CAD is on its way towards the parity zone. Pay close attention to the 1.0120 support area.
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