Have the EU reforms improved the eurozone situation?

Have the EU reforms improved the eurozone situation?

Good morning and welcome to today’s foreign exchange market commentary on Friday, the 16th of March.

Thursday saw equities rally across markets as the US economy continued to impress with better than expected numbers. Risk sentiments improved as initial jobless claims remained lowest in four years while the Empire manufacturing survey, New York’s manufacturing poll, rose unexpectedly. The S&P 500 index topped 1,400 for the first time in four years. However, we need to wait and see if the gains are sustainable.

Meanwhile European Commission President Jose Manuel Barroso said yesterday that important reforms undertaken by EU members Italy and Spain have improved the overall situation of the eurozone. Barroso vouched for the euro’s strength and noted the crisis is not about the euro, but rather of sovereignty of some euro members. He attributed the recent successful crisis management to the determined action of the ECB and the reforms undertaken by countries that were under market scrutiny like Italy and Spain. The crisis is still not over, he warned and added focus should remain on fiscal consolidation and structural reforms.

CURRENCY RATES OVERVIEW

GBP/EURO – 1.2014
GBP/US$ – 1.5716
GBP/CHF – 1.4509
GBP/CAN$ – 1.5610
GBP/AUS$ – 1.4929
GBP/ZAR – 11.881
GBP/JPY – 131.30
GBP/HKD – 12.2010
GBP/NZD – 1.9165
GBP/SEK – 10.672

EUR: The single currency gained against the greenback as investors sell the dollar over positive data from the US. The EUR/USD pair has moved up in the past 24 hours as investors booked profit and touched 1.3120 on the back of this. The pair, however, failed to hold on to the gains and opens at 1.3075 this morning. Sterling continues to be range-bound against the euro and breached the 1.2000 level this morning to open at 1.2035.

USD: The greenback eased against the Pound over profit taking by investors yesterday. A raft of positive data released from the other side of the pond ensured risk remained on the table. The USD has been strong this week and eased yesterday on the back of profit taking by investors yesterday. A Thursday session low of 1.5640 was reversed after economic news from the US lifted investor sentiments and the GBP/USD pair touched advanced to touch 1.5730. The pair sits at that level this morning as another set of data becomes due today morning.

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Have a great day!

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