The Euro continued to fall and reached its lowest level against the USD in two months trading at 1.2787 Tuesday morning. The outlook for the Euro is clouded by uncertainty over the outcome of a Greek parliamentarian vote on further austerity steps needed for Athens to secure international aid. Prior to the vote in the Parliament on Wednesday Prime Minister Antonis Samaras stated that Greece would run out of funds within some few weeks without a quick international bailout injection.
The Greek Parliament shall vote on a package of measures of cost cuts and tax hikes of a total value of 13,5 billion Euros by 2016. Approval of the measures are crucial to unlocking 31,5 billion Euros in aid from the International Monetary Fund, IMF and EU. Release of the bailout funds have been kept on hold for months. The uncertainty surrounding the outcome of the parliamentarian vote, has pushed the euro out of the 1.2800 – 1.3000 trading range held since mid-September. The next immediate technical support level is around 1.2740.
Stocks advanced modestly in New York on Monday in a quiet session the day before the presidential election. President Obama has a slight lead in the last opinion polls, but whatever the outcome the election’s resolution will finally end the uncertainty that has kept the markets stagnant for the past few weeks. Reelection of Obama or a Romney victory could anyhow lead to a relief rally. Nasdaq was the strongest performer yesterday helped by a rally in Apple. Apple’s stocks rose 1,4% after falling 17 percent since its closing high of USD 705 on September 21.
The Australian dollar is steady at USD 1,0369 prior to Australian Reserve Bank’s rate decision later today. A rate cut of 25 basis point to cash rate to 3,0 % is expected. In relation to Japanese yen the USD eased to 80,23 after rallying to a six-month high of 80,68 on Friday.
Oil prices steadied. Brent crude is trading at 108 a barrel caught between uncertainties on the outcome of the US presidential elections and worries about Greece and the euro zone crisis which could delay a global economic recovery and hurt oil demand. Gold (1686) and silver (31.10) have picked up from its lows on Friday.
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