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Forex Flash: US FOMC may lift EUR/USD, Cyprus euro exit to relieve investors – TD Securities

FXstreet.com (Barcelona) - Markets wobbled yesterday with the “worst case scenario” in Cyprus, as the government rejected plan A (deposit confiscation) without a plan B in place. Now, we have to wait but anything resembling a deal (with Russia or Europe) that avoids insolvency and a euro exit will likely be greeted with relief by investors”, wrote analysts Shaun Osborne and Greg Moore, seeing the Cypriot on the back burner today.

Market focus will fall on the FOMC: “We see no big changes in the statement and Chairman Bernanke as likely to try and sooth exit concerns in his post-meeting comments. This should also be modestly constructive for risk”, they continued, seeing potential in the FOMC meeting to add some lift to the EUR/USD, with key support at 1.2875/80 and Cyprus and Italy headlines to be triggers for the time being.

European markets rise, US futures up ahead of FOMC

The German DAX 30 (+0.81%), the French CAC 40 (+1.10%), the Italian FTSE MIB (+1.10%) and the Spanish IBEX 35 (+1.70%) are edging higher on Wednesday after the release of a better EMU current account surplus than expected, easing from €16.0B to €14.8B in January, higher than €7.9B consen-sus. Investors are digesting everything that has happened yesterday, including the Cypriot Parliament rejection of the bailout deal and the Cypriot Finance Minister resignation.
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Forex: EUR/USD retreats from 1.2960

Rumours keep on driving the price action of the single currency on Tuesday. The euro retreated now to the area of 1.2935/40 after rumours about Russian investors buying the Cypriot bank...
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