Euro dollar exchange rate advances as there is "something for everyone in todays markets"

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Published on Wednesday, 11 July 2012 14:06

Written by Sam Coventry

International Money Transfers at our sister site

The EUR has been lifted modestly with the rising tide, but the move is still only one step forward after two-steps back.

The euro dollar exchange rate is 0.18 pct in the blue at 12270 at 15:00 in London.

The euro pound exchange rate is 0.11 pct lower at 0.7885.

"There seems to be something for everyone in this morning’s markets – stocks are mixed, the USD is lower across the board, commodities are a little higher and sovereign credit spreads are a little tighter. Last night’s swing against risk seems to have petered out in the overnight session as investors focus on today’s FOMC minutes for clues on Fed easing prospects," says Shaun Osborne at TD Securities.

TD Securities believe the risks of more QE are rising but it is still not a base case for he firm.

A clear indication that more easing is definitely coming seems very unlikely today which may dampen risk assets and underpin the US dollar (Currency:USD) later.

"Despite more mixed and neutral signals from equities, commodities, and fixed income, the FX majors are showing looking more positive on the macro environment this morning, with the USD broadly underperforming the risky/higher beta currencies," says Osborne.

This with the exception of a lagging NOK, the move seems to be toward the higher yielding G10 currencies, with the AUD and NZD topping the list.

The Euro (Currency:EUR) has been lifted modestly with the rising tide, but the move is still only one step forward after two-steps back.

With EU finance ministers achieving only expected progress on the decisions of the EU summit this week, there does not appear to be much left to provide additional EUR support in the near term. That leaves us looking to sell rallies, although they may be few and far between.