Forex Flash: USD weaker but resiliant following Obama re-election – BBH
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EUR/USD
FXstreet.com (Barcelona) - USD is weaker against most major currencies and risk appetite remains resilient following Obama's re-election, but the move looks short lived following weaker data in Europe write the analysts at Brown Brothers Harriman.
They note that EURUSD made a clean break of its 200MA but was unable to maintain its gains above 1.2850. They believe that the near term risks to the USD are asymmetric in favour of further USD gains, noting that "better US data favours the Dollar relative to the euro zone, as it has in recent weeks."
Looking at today's Eurozone data they note that Retail Sales came in close to expectations at -0.8% YoY, Spanish Industrial Production plunged more than expected to -7% YoY and German Industrial Production came in at -1.2% YoY verses expectations of 0.1%. However, they note that "On the other hand, looming risks from the fiscal cliff favor the dollar if the risk off environment intensifies."
They note that the Canadian Dollar is outperforming amid USD weakness with the pair breaking below the 0.99 level. Elsewhere periphery sovereign debt yields are little changed today with the exception of Greece where yields are sharply lower ahead of the key parliamentary vote on austerity measures.
They note that EURUSD made a clean break of its 200MA but was unable to maintain its gains above 1.2850. They believe that the near term risks to the USD are asymmetric in favour of further USD gains, noting that "better US data favours the Dollar relative to the euro zone, as it has in recent weeks."
Looking at today's Eurozone data they note that Retail Sales came in close to expectations at -0.8% YoY, Spanish Industrial Production plunged more than expected to -7% YoY and German Industrial Production came in at -1.2% YoY verses expectations of 0.1%. However, they note that "On the other hand, looming risks from the fiscal cliff favor the dollar if the risk off environment intensifies."
They note that the Canadian Dollar is outperforming amid USD weakness with the pair breaking below the 0.99 level. Elsewhere periphery sovereign debt yields are little changed today with the exception of Greece where yields are sharply lower ahead of the key parliamentary vote on austerity measures.
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