The single currency continues to lose ground as risk appetite diminishes and traders keep piling into safe havens. There are now some key technical levels coming into play – $1.2600 being the 50 per cent retracement of the June-August move higher – there are few buyers for the euro out there. The current IG Index price for euro-dollar is $1.2609-$1.2611.
Concerns may have subsided over credit risks in the peripheral Eurozone states over the summer, but they are starting to rear their heads once more. As a result, despite some sound macro economic data out of Germany and suggestions by the Bank of England’s Martin Weale that the UK is eyeing a second recession, euro-sterling continues to wind its way lower. Although we still sit some way above the late June lows of £0.8067, the longer term trend is clearly established as downward. The current IG Index price for euro-sterling is £0.8183-£0.8185.
The yen continues to gain against the pound. There is not much in the way of technical support through ¥127, so if the Japanese finance ministry continues to talk down its currency rather than directly intervene, we may well see further gains in the yen. Spread Co offers a spread on sterling-yen of ¥129.26-¥129.34.
The Swiss franc could strengthen against the dollar to SFr.0259. Spreadex has a spot dollar-Swiss franc spread of SFr1.0308-SFr1.0314.
The political uncertainty in Australia has helped fuel Aussie weakness. It is now close to two-month lows against the yen. A break below key support around ¥73.60 could well open up further yen gains towards ¥72.00. CMC Markets’ spread on Aussie-yen is ¥74.21-¥74.25.