Traders wary after Spanish debt downgrade
This morning, financial markets are yet to show their hand as financial traders tread with caution after last night´s Spanish debt downgrade. The important Greek elections are also on the horizon, a big unknown that traders don´t want to be in front of.
The main mover this morning is the British pound which has been relative weak for the last couple of days. Politics may be playing are role here, with the coalition government showing some cracks. Although unpopular in the UK, the markets approve of the austerity measures imposed by the government and are fearful of the political uncertainty caused by a coalition breakdown. The GBP/JPY is down 0.25%, the GBP/USD down 0.20% and the EUR/GBP off by 0.15%.
Today we have the ECB monthly bulletin at 09.00 with CPI at 10.00. US CPI and unemployment claims follow at 13.30. UK Bank of England governor King speaks at the Mansion house tonight at 19.00.
The Canadian dollar is bucking the general trend today with the USD/CAD down 0.17%. The pair has been stuck in a range of late, but at least the rally seen throughout May has been halted. With the US dollar still oversold and a technical basis, the path of least resistance could be for further downside in the short term.
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