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Hopes on Cyprus are pushing the US markets

FXstreet.com (Barcelona) - Equities in the US markets area receovring ground after yesterday drop, pushed higher on hopes of an agreement in Cyprus. The paliamentary debate is going on now, and is expected to last a few hours. Last unconfirmed rumours were talking about a higher levy on deposits above €100K, around 15%, among other issues. The greenback, measured by the US Dollar Index, is losing ground around the mid 82.00s, extending the weekly decline.
DowJones is up 0.57%, ahead of the Nasdaq and the S&P500, advancing 0.64% and 0.62%, respectively.

Bourses in Euroland closed in red with the exception of the British benchmar, up just 0.07% for the day as Cyprus continued to punish sentiment. The German IFO indicator also disappointed, giving markets another excuse to fall. The IBEX35 lost 0.26%, followed by the DAX, 0.27% and the CAC40, 0.12%. The single currency surprised investors cliimbing to weekly highs above the key 1.3000 handle on hopes of a deal in Nicosia, rapidly leaving behind poor data from PMI and IFO.

In the commodities space, the barrel of WTI is up 1.37% at $93.72 while the ounce troy of gold loses 0.45% at $1,606

Forex: USD/JPY trading at support in 94.39/40

The USD/JPY has been held in negative territory Friday amidst a resolution in Cyprus that has left currency markets in limbo during American trading. Having made several failed breaks towards the upside, the pair has now found itself entrenched at 94.39/40 in these moments, down a sizable -0.67% as hopes still run high of a bailout in the island nation.
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Forex Flash: Eurozone austerity, friend or foe? – Goldman Sachs

As austerity has been implemented in the Eurozone, growth has suffered. According to the Economics Research Team at Goldman Sachs, “Fiscal multipliers in the Euro area are likely to have been large, and the fiscal drag on growth in the large Euro area countries in 2012 alone has, on our calculations, been around 1ppt. However, while fiscal tightening has been sizeable, it does not appear to have been above the point where austerity becomes ‘inefficient’ in reducing the deficit owing to its detrimental effect on growth.”
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