EUROPEAN SESSION UPDATE: The German finance minister said the Euro-area is delivering on deficit cuts, as Spain’s Guindos says no country resisting a Spain bailout request…
Friday’s European session again saw a bevy of comments from officials from around the globe, and as positive comments outweighed the negative ones, the Euro climbed another 40 points against the US Dollar.
The initial Euro move came as the Asian session was closing and the European markets were opening. EURUSD climbed 50 points from 1.2935, coinciding with a GBPUSD rally, but it is not specifically clear what caused the risk correlated currencies to rally. BoE’s Paul tucker told a conference in Tokyo that he is pleasantly surprised with the take up of the Funding for Lending Scheme. His comments may imply that the BoE won’t have to add to QE in the upcoming month, which would be Sterling positive, but does not easily explain the rise in Euro.
Instead, the rally may have been due to the general building anticipation for Spain to agree to the ECB bailout and ensuing conditionality. Spain’s Economy Minister Luis de Guindos said today that there is no political resistance from within the Euro-zone to a Spanish bailout request, according to a Reuters report. Guindos added that Spain’s decision to ask for aid would not depend on a rating agency, referring to a threat of junk rating of Spanish sovereign debt. Again, the reason for the rally is still uncertain.
Also in the Euro-zone, German Finance Minister Schaeuble said that he is certain that most European uncertainty will be overcome in a year. He said the Euro-area is delivering on deficit target cuts. However, regarding Greece, Schaeuble said again that he is waiting for the Troika report.
In China, Yuan loans fell to 623.2 billion Yuan in September, disappointing expectations for 700 billion Yuan of loans. Following the disappointing numbers, PBOC’s Yi Gang said that the China GDP in 2012 is expected to be about 7.8%, and the CPI is expected at 2.7% year over year.
In other economic releases, initial estimates for Italian inflation were confirmed at 3.2% annually. Also, Euro-zone industrial production unexpectedly rose for the second straight month. However, neither release had a significant effect on trading.
EURUSD is currently trading around 1.2960. The pair has traded within a range between 1.3050 and 1.2800 over the past three weeks. Resistance and support could now be provided by the key levels 1.3000 and 1.2900 respectively.
EURUSD 1-hour: October 12, 2012
— Written by Benjamin Spier, DailyFX Research
“Meet the DailyFX team in Las Vegas at the annual FXCM Traders Expo, November 2-4, 2012 at the Rio All Suite Hotel & Casino. For additional information regarding the schedule, workshops and accommodations, visit the FXCM Trading Expo website.”
This article (European Uncertainty Will be Overcome In a Year, Says Schaeuble) was originally developed by and is property of American Banking News. Checkout American Banking News for up-to-date banking news and peer to peer lending news.