The Bailout Battle Rages on in US Lesgislature Pressuring Risk Appetite

Daily Forex Fundamentals | Written by AC-Markets | Feb 14 09 05:59 GMT |

The dollar regained momentum on waning risk appetite, and uncertainty regarding the outcome bailout bill. The EurUsd settled mostly flat in today' session at 1.2862, while the Usdjpy gained 100pips to seeing resistance at 92. The GbpUsd gained 85pips to the mid range of 1.43 after a volatile week in the marketplace. Equities were mixed in the US and Europe with the Dow lower by 1% or 82pts and the CAC higher by 1% or 33pts. Bond yields were mixed as well with the 2yr higher by 2bps at .96% and the 10yr unchanged at 2.8%. Commodities saw a rise in the energy sector with oil at $37bbl up 10% and gold slightly lower by .53% at $941oz. During the European session, the Eurozone GDP contracted 1.5% QoQ vs. 1.3% exp, the biggest fall in 13 years. Meanwhile, German GDP declined 2.1% QoQ vs 1.8% exp, and this is the largest drop since the reunification of the country. These sour figures reminded the market that the Eurozone still faces a very difficult economic challenge. We expect that risk sentiment will remain a main driver of all markets and the EurUsd will persist in a broad downtrend in the long term. In the US, the House and the Senate continue to work over final details on the reduced $789B compromised economic stimulus plan. The G7 meeting starts in Rome today would be closely watched. No major data releases scheduled today. ACM FOREX Disclaimer: This report has been prepared by AC Markets (thereof ACM) and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Salesperson or Traders of ACM at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.