The Swiss National Bank (S.N.B.) re-stated today it would take measures necessary to prevent the euro from falling...
The Swiss National Bank (S.N.B.) re-stated today it would take measures necessary to prevent the euro from falling in value below CHF 1.20. Additionally, the bank reported it would buy as much euro as necessary to prevent it from trading below the mark.
In other news, German industrial output dropped by a seasonally adjusted 2.9% in December 2011 while November received an upward revision leaving no change in the month. The December figure was much lower than analysts projected with a 0.2% rise for the month.
Greece is moving closer to resolve in agreements between the country and its creditors today. Greece’s officials have been combining details for the final loan-deal-agreement before their scheduled meeting later in the day (19:00 GMT). In the meeting, the political leaders will work toward agreements on the government cutbacks for spending reductions in order to be able to receive the new bailout funds that are necessary to prevent defaulting on loan payments (€14.4 billion) due next month. Additionally, Greek Prime Minister Lucas Papademos is set to have a cabinet meeting on Wednesday to receive formal approval for the additional €130 billion bailout package. The prime minister is also expected to meet with the managing director of finance affairs Charles Dallara, who has experience in debt restructuring negotiations in the private sector. Greek political party officials have been feeling social push backs domestically as they are forced to manage reform demands set by outside officials such as the European Commission, International Monetary Fund and the European Central Bank as well as retain support from their parties ahead of new elections.
The EURUSD rose to a two month high today on reports that Greece was close to reaching an agreement on the austerity measures. The EURUSD broke through resistance at 1.3200 today and the next level of resistance is seen at 1.3300. If an agreement is finalized later today, we might see the EURUSD target 1.3200. Further event risk lies on the ECB rate decision on Thursday.
Eugene Ross, Analyst
Admiral Markets
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