Spain BBVA Bruit Short-lived EURO and Stocks Rebound

Thursday, May 27, 2010

Concerns of Spain BBVA leads to EURO recovery only for a short span of time and again euro resumes its weakness in Yesterday's trading. The bruits about the Spain's second largest bank spreads in the market that the bank is unable to renew short-term funding of $1 billion. This leads the currency pair EUR/USD to back-trade 1.22 level below where as there is a support seen in the currency pair EUR/CHF that is of 1.4138 while the pair EUR/GBP falls to a low level that is below 0.8454.

Since we have seen that the US stocks are unable to steady at the earlier gains show in the US session and falls back in Yesterday trading still after this USD currency and Japanese Yen are trying for the better approach to take lead in the Forex market. As we have noticed that in early US session the stocks are leading the market due to the strong economic growth. The jump of 14.8 percent in the month of April was noticed in the US home sales that rises to 504 k and leads the annualized rate to two year high.

April month was good for the durable goods that is it leads to a growth of 2.9 percent. Although there was drop down seen in the ex-transport order. Investors are in dilemma for buying the Dow as it seen that it has faced a strong resistance at the 10200 level which ultimately leads to the fall of the low below the 10000 level at the end of the forex online session yesterday. It drops down to 0.7 percent in the whole day and reaches to 9975 level.

The warning is given to euro zone countries along with other countries that they have to reconcile support for reaching to some stable and sustainable fiscal path said by the Organization for Economic Co-Operation and Development. It is also mentioned by the organization that due to the sovereign financial crisis the euro zone strength is in high demand otherwise it may a chance that Global economy has to face a double dip recession very soon.

The organization ordered Japan to make a credible budget plan to measure the spending. as we know that UK is facing a weak fiscal consolidations therefore it has given advised to make a strong move to strengthen their fiscal position in the market. The market anticipated the growth of Global economy in this year is up to 4.6 percent. The significant rise in risk is noticed in bond yields. Although it was seen that the OECD remains optimistic about the growth of Global economy in the market.

After April 30 meet the BOJ has released minutes Yesterday. The minutes contains the views of the members of the meet that all agreed for the same thing that the "economic global growth foundations should be strengthened". Some members also shows their concerns in terms of the side effects of the easing in the market which ultimately impacts on the financial condition if there was a fall seen in the profit of the bank in terms of interest rate.

Now about the strengths and recoveries seen in the Yesterday's Forex session. First of all about the US major currency Dollar. There was a recovery shown by the Dollar in the late Forex session as it reaches to 86.33 level but the up gradation in Dollar is still limited at the level below 87.46 high. We cannot deny the rise seen in the dollar but it is also the truth it is not equal to other major currencies of the market. The fall of US stocks Dow also strengthen the rise of Dollar since it is the truth that the risk sentiments are the major driver in the Forex market.

Now the latest update about the euro currency as it we have seen that there is no change noticed in the weak euro currency instead there is a sharp fall in the currency pair EUR/GBP. The whole fall seems to be resumed at the level of 0.9317. EUR/CHF is also seems to be rebound on the last week's way for reaching a high of 1.45867 again. But there is a possibility of intervention is also seen near the level of 1.40 in the currency pair. That's all about the latest about the Forex market.

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