Moody’s reason for saying it may downgrade Spain’s debt rating is the country’s challenging refinancing needs next year. A downgrade could be triggered by “Spain’s vulnerability to funding stress given its high refinancing needs in 2011.” The country also faces a complicated outlook for the country’s banks and regional governments.
The EUR/USD fell through our lows from yesterday at around 1.3370, and slipped down to 1.3285, near our 200-period MA. That was also a 61.8% retracement of the rally to open the week. We see the pair now retesting our old short-term support as resistance, so this is our next pivot.
USD Supported vs Yen, Commodity Currencies by Calm of FOMC
The USD was well supported overnight against the yen and commodity currencies after the Federal Reserve statement reinforced expectations that it would go through with the full $600 billion of long-term Treasury purchases. The FOMC also did not sound like it was calling for another round of quantitative easing so that should help the USD. As we enter NY trading the USD pared its overnight gains, and was back to event prior to the NY open.
GBP Pressured on Employment Data
The GBP/USD moved strongly in favor of the Dollar overnight, breaking the pair out of an upward sloping channel, and moving below the 200-period MA at around the 1.5750 level. The pair then swung to its next pivot of 1.5650. The UK unemployment rate for the three months through October rose for the first time in six months. It climbed to 7.9% from 7.7%. The Claimant Count for November, the monthly measure of new claims for unemployment benefits fell by 1.2K, smaller than the -2.9K drop in claims expected. The CBI Distributive Trades Survey, which measures retail trade rose to 56 for December, much better than the median forecast of 35.
http://www.fxtimes.com/
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