Risk Appetite Emerges

Risk appetite has emerged as the austerity measures seem well on the way to clearing their hurdles via passage in the Greek government. Investors have seemingly bought into the short term optimism. The EUR gained significantly against the USD on Wednesday adding to its recent winning streak. The GBP and AUD have also followed suit and have made strides against the Greenback. Global equity markets have turned bullish also and have been led by Wall Street which has put together a solid few trading sessions in a row. The Greek government has another package of measures which must be passed today via a vote, but it appears that this will be achieved. The EUR saw a steady amount of backing before the Greek votes were known yesterday and the question may become how much more backing the Single Currency can muster.

The confidence game that has been played by the E.U. and IMF has passed its tests for now but plenty of challenges remain. European data will be relatively light but German Retail Sales and their Unemployment Change numbers will be published. However the focus will certainly continue to be on the debt crisis and it handling for the EUR. The U.S. published a good Pending Homes Sales figure on Wednesday. Its outcome of 8.2% was a surprising jump above the expectation of only 2.4%. Today the weekly Unemployment Claims will come from the States along with the Chicago PMI reading. Yesterday’s better housing sector result was welcomed with open arms, but the jobless situation remains troublesome and the Manufacturing marks recently have shown a steady withering of sentiment. The USD has been beaten back this week and this has come as the debt situation in Europe has eased for the moment and Wall Street has found some stability through gains. The USD needs to be watched closely these next two days after being pushed back to the weaker part of its range against the EUR and AUD.

U.K. data on Wednesday provided little in the way of surprises, but the GBP managed to gain under the sails of a good breeze from the EUR. The Nationwide HPI will be released this morning, which will get the interests of some investors and carries an expectation of 0.1%. The Sterling has provided little in the way of fireworks compared to the EUR/USD pair in the recent weeks. The range for the GBP has been rather tame. Opportunities exist within the GBP for traders willing to test its range.

The AUD nearly reversed all loses from the past couple of weeks on Wednesday. The AUD finds itself squarely on the stronger side of its range again. This has taken place as the European debt situation has eased for the moment and Gold has rebounded. The precious metal as of this writing is around 1508.00 USD. Crude Oil along with the other commodity markets gained too. The JPY has gone back towards the stronger part of its famous consolidated range against the USD.

These next two days of trading should consist of a combination of questions being asked about Greece and its ability to really fulfill its austerity measures. The confidence game that is being played by officials who are trying to sell the song of stability for the European Union, even though its debt situation still has blemishes is a certainty to continue. For the moment investors have apparently calmed their nerves enough to participate with increased risk appetite in the Forex and Commodity markets.

Written by bforex.com