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Greece Continues to Threaten Stability of Euro

May 11, 2011 by

EUR/USD traded without any particular trend in the first half of today’s trading session, but plunged heavily in the second. Greece with its debt problems continues to threaten stability of the Eurozone and the European policy makers may refuse to extend the deadline for repaying the debt if the country wouldn’t take measures to improve its economic health, including such unpopular steps like budget spending cuts. The US data today was puzzling as the trade balance deficit increased more than expected, while the federal budget balance deficit shrank more than four times. EUR/USD trades at 1.4195 now.

US trade balance deficit widened to $48.2 billion in March from the revised February reading of $45.4 billion. Market participants expected the deficit to grow to lesser extent, somewhere near $46.8 billion.

Crude oil inventories increased by 3.8 million barrels from the previous week and are above the upper limit of the average range for this time of year, while total motor gasoline inventories increased by 1.3 million barrels last week and are in the lower limit of the average range.

Treasury budget deficit decreased dramatically to $40.5 billion in April from $188.2 billion in March. The decrease beat even the optimistic forecast of a $50.5 billion deficit.

EURUSD for 2011-05-11

If you have any comments on the recent EUR/USD action, please reply using the form below.

2 Responses to “Greece Continues to Threaten Stability of Euro”

  1. Zeshan

    Where do you see the pound moving? It seems a lot of traders are expecting a rate increase in the near future. I find the lack of growth coupled with inflationary pressures ( the reason many expect a rate hike) to be more troubling than the market thinks so.

    Reply

    admin Reply:

    I wouldn’t expect much of the GBP/USD in nearest future.

    Reply

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