Daily Market Outlook by AceTrader

Market Review – 03/03/2010 22:51GMT

Euro rises again on Greek austerity plans

The euro surged for a second day on Greek austerity plans while the greenback fell across the broad on Wednesday as global equities and commodities prices rose, boosting investors’ risk appetite and spurring demand for currencies tied to growth.   

The single currency briefly dipped to 1.3593 in European morning but rebounded sharply from there after Greece announced plans for a further $6.5 billion in pay cuts and tax hikes to reduce its deficit, easing worries about the country’s debt crisis. The euro rallied to 1.3736 in NY afternoon, the highest level versus the dollar in two weeks, and then stabilized.  
Versus the Japanese yen, the dollar rebounded to 89.00 in European morning before resuming recent decline and tumbling to 88.32 in New York afternoon. On other news, the Federal Reserve’s Beige Book said the economy continued to improve modestly despite the recent snowstorms.  
Despite brief dip to 1.4976 at European opening, sterling rebounded strongly from there on data that showed Britain’s services sector recorded its strongest expansion in more than three year. U.K. CIPS services PMI data which came in at 58.4 in February ( versus economists’ forecast of 54.9 ), was well above the reading of 54.9 in January. Cable hit an intra-day high of 1.5131 in NY afternoon before trading sideways.   
Data to be released on Thursday include Japan Business capex, Australia Trade balance, Swiss SNB’s 2009 Annual Result, EU GDP, U.K. BOE rate decision, ECB rate decision, U.S. Jobless claims, Labour cost, Productivity, Durable goods (rev.), ex. Defense (rev.), ex. Transport (rev.), Factory orders, Pending home sales, Canada Building permits, Ivey PMI.