EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.32% against the USD and closed at 1.2973, as the International Monetary Fund lowered its growth forecast for the currency bloc and as the European leaders continue to struggle to contain the region’s debt crisis.
Yesterday, the International Monetary Fund indicated that it expects the combined gross domestic product of the Euro-zone’s 17 members to fall by 0.4% FY2012, and grow by 0.2% in the FY2013. It also cut its 2012 global growth forecast to 3.3% from a July estimate of 3.5%.
Meanwhile, in a meeting held in Luxembourg, the Euro-zone finance ministers launched their permanent €500 billion bailout fund and delivered a united defense of Spain stating that the country was taking steps to overhaul its economy, successfully funding itself in the financial markets and did not need a bailout.
In the Euro-zone, the Sentix index rose to a seasonally adjusted reading of -22.2 in October, from -23.2 in September.
Separately, trade surplus in Germany narrowed to €16.3 billion in August, compared to a €16.9 billion surplus in the previous month, whereas the current account surplus narrowed to €11.1 billion in August, from a €11.7 billion surplus reported in the previous year. On a seasonally adjusted basis, exports rose 2.4% (MoM) in August, while imports remained unchanged at 0.3% (MoM) in August. Additionally, German industrial production decreased at a slower-than-expected pace in August, amid marked reduction in construction activity.
According to the latest survey published by Bank of France, the French economy is expected to contract 0.1% in the Q3 FY2012, after stagnating in the past three quarters.
In the Asian session, at GMT0300, the pair is trading at 1.2985, with the EUR trading 0.09% higher from yesterday’s close.
Today morning, Fitch Ratings assigned an ‘AAA’ credit rating to the European Stability Mechanism (ESM).
The pair is expected to find support at 1.2949, and a fall through could take it to the next support level of 1.2913. The pair is expected to find its first resistance at 1.3010, and a rise through could take it to the next resistance level of 1.3035.
The currency pair is trading above its 20 Hr moving average and just below its 50 Hr moving average.
