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EUR/USD

The Euro maintained a firmer tone in early Europe on Monday as French President Sarkozy pledged support for Greece. The Euro also gained some support from generally firm global risk appetite.

The Euro-zone economic data was mixed with the Sentix business confidence index slightly stronger than expected for March while the increase in German industrial orders was slightly lower than expected and the overall market impact was limited.

During the day, risk appetite failed to sustain the initial optimism which hampered the Euro. The deterioration was triggered in part by comments from the Greek prime Minister that the fiscal crisis could spread to beyond Europe which reminded markets of the risks ...

EUR/USD

The currency markets were generally quiet ahead of the US employment data release with the Euro holding just above 1.3550 against the dollar.

The payroll data was slightly stronger than expected with an decline in employment of 36,000 for February after a revised decline of 26,000 the previous month while the unemployment rate held at 9.7%. There were some job losses due to the bad weather conditions, although the survey’s methodology suggests the losses may have been limited.

The headline data was generally favourable, but there will be some unease over the decline in work week as this suggests that underlying conditions are still fragile. The Federal Reserve will probably be looking for ...

EUR/USD

The Euro failed to extend gains in Asian trading on Thursday and weakened toward the 1.3650 region against the dollar ahead of the ECB interest rate decision.

The central bank interest rate decision was in line with expectations as interest rates were left on hold at 1.00%. The bank continued the gradual removal some of the longer-term liquidity measures which had been introduced during the crisis, but the 7-day and 30-day liquidity auctions will be maintained until at least October which illustrates that the bank will continue to take a cautious stance given the uncertainties.

ECB President Trichet also commented that IMF support for Greece would not be appropriate and these remarks tended ...

EUR/USD

The Euro found support below the 1.36 level on Wednesday and maintained a generally firmer tone during the day in a continuing correction from recent lows.

The Greek government confirmed that it would make a further EUR4.8bn in budget cuts in order to curb the budget deficit and this helped maintained a slightly more confident tone towards the Euro. There will, however, still be fears that there will be a high degree of internal opposition to the budget cuts. The mood of confidence could unravel quickly and there is still likely to be important tensions with Germany and France.

The ECB council meeting will be watched closely on Thursday even though interest rates are unlikely to be changed. ...