News paper reports that the FIAT takeover of GM"s European operations may result in 18,000 job losses has taken its toll on the single currency. Reuters News reported on an article published by German newspaper FA that cites internal documents that FIAT plans to close all 10 OPEL manufacturing plants between 2011 and 2016 including partial or full closures of parts manufacturing in Germany and Austria, as well as Italian and British plants. EUR/USD has slipped down to fresh US session lows at 1.3318, with traders focusing on Thursday"s ECB meeting in light of these fresh reports.
US equity markets are down 0.5/1.4% amidst concern that Bernanke"s comments that the banking sector remains vulnerable to a relapse means that the delayed stress test report may have more bad news in it than has already been leaked. Add to that ECB speaker Nowotny"s comments this morning that deflation is a greater risk than inflation in the near term puts the ECB front and centre in the global effort to sustain the nascent bout of confidence that has buoyed equity markets. Oversold hourly Bollinger bands between 1.3325 and 1.3300 suggest the next 20 pips should prove supportive, but price action is heavy, and EUR/USD has been defying gravity for some time.
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