Daily Market Outlook by AceTrader

Market Review – 22/04/2010 21:51GMT

Euro plunges to a near one-year low on Greece’s worse-than-expected budget deficit n Moody’s downgrade

Despite euro’s brief bounce to 1.3422 in European morning after the release of higher-than-expected German manufacturing PMI which rose to 61.3 in April versus economists’ forecast of 60.1,

the single currency retreated after the Eurostat revised up Greece’s budget deficit by nearly a full point to 13.6% of gross domestic product last year. The Greek/German 10-year government bond yield spread jumped to 542 basis points from around 516 basis points at Wednesday’s settlement. Euro later picked more downward momentum and tumbled to a fresh 2010 low of 1.3257 after Moody’s downgraded Greece’s sovereign ratings by one notch to A3 and indicated it may lower it further, citing the risk that the debt-laden country may end up paying a lot more for its borrowing than previously thought.   
The British pound traded with a firm undertone initially on Thursday and hit an intra-day high of 1.5476 in European morning. However, cable swiftly retreated from there , reaching 1.5341 in NY morning before stablizing. Cable was pressured by a series of weaker-than-expected economic data.U.K. retail sales rose by 0.4% m/m n 2.2% y/y in March respectively, lower than economists’ forecast of 0.6% m/m and 2.4% y/y increase. CBI manufacturing order book balance came in at -36 in April, weaker than the economists’ forecast of -34.0.  
Economic data to be released on Friday include: Germany Ifo index, U.K. GDP, EU Industrial orders, Canada CPI, U.S. Durable goods, U.S. New home sales, Canada Retail.