EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.52% against the USD and closed at 1.3064, as risk appetite increased buoyed by Greece’s $13 billion bond buyback plan and amid upbeat Chinese economic.
Yesterday, in an effort to reform its waning economy and reduce its debt to sustainable levels, Greece revealed plans to spend up to €10 billion ($13 billion) in a bond buyback program that it hopes would help stabilize its mountainous debt.
Moreover, the Euro-zone finance ministers yesterday approved €39.5 billion aid to Spanish banks, formally ending a months-long effort to draw a line under a crisis that had threatened to push the country for a bailout.
On the economic front, Euro-zone’s final manufacturing PMI rose to 46.2 in November, in line with the flash estimate and compared to a reading of 45.4 in October. Germany’s seasonally adjusted manufacturing PMI rose to 46.8 in November, from the previous estimate of 46.0. Meanwhile, the French manufacturing PMI rose to a reading of 44.5 in November, below the flash estimate of 44.7. In Italy, the seasonally adjusted manufacturing PMI declined to 45.1 in November, from 45.5 in October. On a seasonally adjusted basis, manufacturing PMI in Spain rose to 45.3 in November, from 43.5 in October.
Also yesterday, the Federal Reserve Bank of St. Louis President, James Bullard indicated that replacing Operation Twist’s swap of Treasuries with outright purchases of the same amount of securities would represent a policy easing that could risk higher inflation. However, he also stated that replacing Operation Twist with smaller bond buying program would boost to the economy.
Moreover, the President of the Boston Fed, Eric Rosengren, stated that he sees a “strong case” for the central bank to buy bonds at the current monthly pace of $85.0 billion following the expiry of its Operation Twist program.
In the Asian session, at GMT0400, the pair is trading at 1.3056, with the EUR trading marginally lower from yesterday’s close.
The pair is expected to find support at 1.3025, and a fall through could take it to the next support level of 1.2995. The pair is expected to find its first resistance at 1.3081, and a rise through could take it to the next resistance level of 1.3107.
Trading trends in the pair today are expected to be determined by the release of the producer price index in the Euro-zone.
The currency pair is trading just above its 20 Hr and 50 Hr moving averages.
