Buyers Going Into The Weekend?

The EUR picked up a bit more ground against the USD on Thursday as investors search for its real value. The Greek government passed the second round of their austerity measures and news has circulated that German banks have agreed to allow the Greek debt that they hold to be ‘rolled over’. From the States the official Fed policy of quantitative easing came to an end. And the Americans released weekly Unemployment Claims data yesterday and it proved worse than expected. However Wall Street turned in another solid day of gains across its major indexes. The fact that Europe has managed to hurdle this latest Greek problem has helped the EUR sustain its pace against the USD and the range that the EUR/USD pair has experienced has been fairly sound taking into consideration the amount of concerns that abound.

Before going into the weekend traders should note that this coming Monday is the Independence Day holiday in the States, meaning that volumes early next week will be thin, and if positions are thus held into the weekend that participants may see a quiet market with sudden bursts of activity. For all the strength that the EUR managed to muster the past few days the same cannot be said for the GBP. The Sterling has traded under the shadow of the EUR for some time, but upon losing ground the past few weeks against the USD, it has not shown the same ability to climb back to the stronger parts of its range. The Nationwide HPI came from the U.K. yesterday and it proved lackluster. Today will be quiet with data from London and traders will be able to take advantage of the range trading within the GBP if they have the patience.

Gold slipped back to the 1500.00 USD mark on Thursday. The rise in the price of Gold the day before proved short lived as the precious metal was taken back to what has been a short term consolidated range. Crude Oil also found that it could not muster much in the way of gains yesterday and was pushed slightly backwards. Commodity prices among the physicals continue to see pressure from a definite concern growing among investors that the global economy is slowing. The AUD did lose some ground yesterday too, but it is still near the higher part of its range. The Australian currency could prove volatile today and early next week taking into context its recent trading. The JPY has maintained its well known range. The Japanese economic data continues to show that Japan faces a tough road but the JPY has still found a measure of backers.

Although Greece has managed to push back yet again its naysayers, the fact remains that the nation faces difficult tasks ahead. The bailout package it is set to receive is its second large chunk of money in terms of a handout from benefactors and it is very unlikely that it will be able to get a third. Thus the austerity measures that Greece has passed will have to be met to the best of its abilities and there are many analysts that believe that the tasks that it faces are going to prove nearly impossible to accomplish long term. While Europe has managed to climb once again out of the barrel it still faces the challenge of getting many of its nation’s houses in order economically. Europe has sluggish growth on a whole and its debt concerns are not the problems of only one nation.

The EUR/USD will remain under the microscope all summer long because of the European problems and because the U.S. economy appears to be hitting a soft patch. The question investors are asking is if the U.S. can avert another recession. Today the U.S. will see a Revised Consumer Sentiment report from the University of Michigan and importantly the ISM Manufacturing PMI will be released. Market participants in the States, however may start vanishing a bit early in the day due to the upcoming holiday. Nevertheless, the manufacturing report will be noteworthy and a good barometer of what is to come for the U.S. economy. It looks like Wall Street is set to end its weekly losing streak today, but it remains to be seen if investors will by buyers going into the long weekend.

Written by