Euro falls after Portuguese rating slashed

Aussie dollar –Australian employment data will be released overnight with investors earlier getting prepared for the event by buying the Aussie sending it to as high as $1.0733 U.S. cents. However, the risk-off tone clouded by the omnipotent European debt crisis scarred the Aussie sending it to $1.0657 U.S. cents at its worst point of the morning.

British pound – The pound swung to a loss after a fairly positive start as troubles continued to brew in Brussels. The health of the British economy was once again under scrutiny this time in light of a British Retail Consortium Report that showed inflation running at a nearly three-year high. Going back three months or so such a report would have fuelled an argument that the Bank of England ought to start the monetary tightening process. Today, however, the cooler economic climate coupled with a better understanding of the source of inflationary pressures circumvents such arguments. The BRC said that retail prices rose by 2.9% compared to one-year ago, which marks the fastest pace of increase since October 2008. The underlying causes are rising commodity costs and value-added-tax increases. The pound slumped versus the dollar to $1.5986 at its lowest point of the morning.

Japanese yen – The yen rose as risk aversion grew. Local stocks rose overnight but the growing sense of fear surrounding the euro among investors as trading passed over to New york caused the yen to rally versus the dollar to a session high of ¥80.81 while against the euro it rallied to ¥115.91.

Andrew Wilkinson is a Senior Market Analyst at Interactive Brokers LLC

Note: The material presented in this commentary is provided for informational purposes only and is based upon information that is considered to be reliable. However, neither Interactive Brokers LLC nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither IB nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance is not necessarily indicative of future results.

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About the Author
Andrew Wilkinson

Andrew is a seasoned trader and commentator of global financial markets. He worked for several London-based banks trading cash and derivatives before moving to the U.S. to attend graduate school. Andrew re-joins Interactive Brokers following a two-year stretch at a major Wall Street broker-dealer as their Chief Economic Strategist. His coverage of stocks, options, futures, forex and bonds regularly surfaces in global media, and over the last several years Andrew has made many TV appearances on Bloomberg, BBC, CNBC and BNN and Yahoo Finance.

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