Forex: Tuesday's review
The euro appreciated against the majority of its peers as the European Central Bank signaled its approval of Greek bond rollovers and equities advanced for the first time in a week. The Standard & Poor’s 500 Index rose 0.5%, snapping four consecutive days of losses. The MSCI World (MXWO) Index gained 0.4%.
ECB President Jean-Claude Trichet yesterday gave his first signal that he endorses encouraging investors to buy new Greek bonds to replace maturing securities, potentially making the debt situation more sustainable.
A debt rollover is being considered as an alternative means of easing Greece’s funding squeeze, two officials familiar with the matter said last week on condition of anonymity. Investors may be given preferred status, higher coupon payments or collateral as incentives to roll over the holdings when they mature, two separate officials, who declined to be identified because the talks are in progress, said last week.
The Swiss franc weakened against all major counterparts as data showed consumer prices were steady last month, damping speculation that the nation’s central bank will raise borrowing costs.
The franc weakened for the first time in three days versus the euro. Consumer-price inflation in May was unchanged from a month earlier, the Federal Statistics Office in Neuchatel said today. Prices rose 0.4 percent from a year earlier. Economists’ median estimate was for a monthly decline of 0.1 percent. The franc reached a record against the dollar before declining.
The Swiss currency has strengthened amid concern that the European sovereign-debt crisis will deteriorate, spurring investor demand for a haven.
EUR/USD: the pair grown in area $1.4690.
GBP/USD: the pair grown in area $1.6440.
USD/JPY: the pair hold on Y80.00-Y80.35 range.
At 0900GMT, the second release of Q1 EMU GDP is due, while at 1000GMT, German industrial output for April is due. US data starts at 1100GMT with the weekly MBA Mortgage Application Index, while is followed at 1400GMT by Q1 Services data and then at 1430GMT by the weekly EIA Crude Oil Stocks data. The Fed Beige Book, the Fed's compilation of anecdotal evidence about conditions in the 12 District Bank regions, is due at 1800GMT.