USD News: At 85 USD a slow leap to 9.4%

USD News: A frantic rally in oil prices sparked by the agreement of EU leaders to adopt measures for the relief of countries facing the pressures of the market and move towards closer integration of banking.

The contract of supply of crude gained 7.27 USD August or 9.4% to end trading in 84.96 USD a barrel on the New York City. It was the biggest percentage rise in crude by March 2009.

In weeks later won 6.5%. The image is negative but the June quarter and the slow decline to 1.8% and 18% respectively. It was the worst quarterly performance since late 2008.

European leaders in Brussels agreed to move to a narrower banking framework and asked the European Commission to rapidly present its proposals for a single supervisory mechanism. At the same time agreed to allow the European Support Mechanism (ESM) have the possibility of direct recapitalization of banks.

For countries that have been found in the center of pressure lately, European leaders agreed to use existing mechanisms to rescue euro zone "flexible and effective way" to "stabilize the markets of the Member States comply with the recommendations."

EUR News: the EUR stabilized against the USD before the summit.

A wait was up this afternoon after a wave of concern has swept the eve of the foreign exchange market. The prospect of the EU summit, starting Thursday, will bring together Heads of State and Union government actually encourages caution.

To 13 hours, the eur remains stable (- 0.07%) to 1.2494 usd. It fits in hand down against the yen (- 0.37% to 99.20 yen, the eur) and sterling (- 0.47% to 0.7990), neutrality is always appreciated against the Swiss franc Swiss (1.2010 franc Eur).

The atmosphere is much optimism vis-à-vis the future of the eur area. Yesterday, Spain filed its request for assistance to the eur area to recapitalize its banking sector, the envelope up to 130 billion eur. "Traders have again sought the safety of the greenback, especially since the Federal Reserve decided last week not to embark on a new quantitative easing program, opting instead for an extension of its operation Twist '", commented the specialists. This is all that Moody's has already downgraded the debt of nearly thirty Spanish banks.

Pending on the secondary market yield on government bonds in Spain dates back 10 years and stood at noon to 6.71%.

It will likely wait until Thursday for a clearer leadership emerges only. According to the agenda currently available, the European Council in Brussels will begin Thursday, June 28th at 2:15 p.m. ET the following day will end Friday. "The European Council set the directions for growth and employment in the short to medium term as part of fiscal consolidation efforts are being made intelligent," it said in the agenda. Press conferences are planned on Thursday night and Friday.

"The outcome of the meeting last Friday between the leaders of French, German, Spanish and Italian made no concrete solution to the crisis of sovereign debt, fueling fears instead of a negative outcome also at the summit Brussels ".

It is not more excited at Aurel BGC: "Angela Merkel's statements have dampened the enthusiasm born of some investors. German chancellor rejects bulk Eurobonds, the Eurobills and the possibility of a European guarantee of deposits, which it considers unfounded an economically-productive and against '.

"The caution is around the eur area still worried investors as" abounds Saxo Bank. In addition, Cyprus could take over from Spain on the list of States in search of funds. The island may request "an amount estimated at between 6 and 10 billion eur, or about more than 25% of GDP", calculates Saxo.

Side of U.S. statistics of the afternoon, is expected mainly consumer confidence index calculated by the Conference Board. it is expected to decline in June from 64.9 to 64, against a background of domestic economic statistics have disappointed in recent weeks.

The EUR is accelerating its rebound against the USD after a rumor about the EFSF

The EUR accelerated its rebound Tuesday after rumors of a deal the Europeans to buy a portion of the debt of EUR area countries in difficulty and curb the risk of contagion.

Around 6:15 p.m. GMT, the eur bought 1.2713 usd against 1.2571 usd at 2100 GMT Monday.

The eur rose against the yen also, to 100.40 yen against 99.45 yen late Monday.

For its part, the usd retreated against the Japanese currency to 78.97 yen against 79.11 yen yesterday.
The single currency was boosted by an article in the Guardian newspaper that European countries have agreed on the sidelines of the G20 which takes place in Mexico, to use the resources of the relief fund of the eur area (EFSF, which will be replaced early July by the European Stability Mechanism MES) to acquire part of the debt of close to bankruptcy.

The newspaper, citing the G20 leaders, "an announcement could be made in the coming days".
This measure, which Germany said there is still fiercely opposed ten days, "is aimed primarily Spain and Italy", the fourth and fifth European economies, noted Sebastien Galy, Societe Generale.

"It would be a huge leverage," he added, noting that this amounted to build community bonds. 

"The market is depressed, (this unconfirmed) gives him some drugs and allows him to calm down,"

This rumor allowed traders to ignore the moral plunge of German investors in June as well as soaring borrowing rates in Spain.

Spain managed to raise 3.040 billion eur to 12 and 18 months Tuesday, an amount slightly above the target (2 to 3 billion eur), but had to concede interest rates up sharply .

"Such a result makes it virtually certain that without major changes in the Monetary Union, Spain is going to need a full bailout," said Kathleen Brooks.

In addition, the market was optimistic about the chances of seeing the U.S. Federal Reserve announced Wednesday monetary easing measures. "An estimated 75% chance of the Fed decide to see a measure of monetary easing," said Mr. Galy.

Such measures, designed to support a recovery that is showing signs of weakness, usually result injections of liquidity into the economy, diluting the value of the usd and making it less attractive to speculative investors.

Around 6:15 p.m. GMT, the British pound retreated against the eur at 80.73 pence per eur, and left again on the rise against the greenback at 1.5746 usd.

The Swiss franc remained stable against the eur at 1.2008 Swiss francs to the eur and rose against the greenback at 0.9445 Swiss francs to the usd.

The Chinese yuan ended at 6.3547 yuan against one usd for 6.3575 yuan on Monday.

FOREX NEWS: New tensions in the bond market, the Greek rates up sharply

The bond market suffered Thursday morning new tensions that affected mainly the rate Greek, Spanish and Irish, signs of lingering fears of contagion from problems of public debt across the EUR zone. 

Ratings agency Moody's said Thursday in a report that the Greek financial crisis represented a significant risk of contagion to the banks of several European countries including Portugal, Spain, Italy, Ireland and the UK. Legislative elections are held Thursday in the latter country. 

The market showed nervous before the press conference of the European Central Bank (ECB), the meeting of its Board of Governors started the morning in Lisbon. President Trichet of the ECB will have to answer many questions on this topic at the traditional press conference following the board meeting, scheduled for 24:30 GMT.

 "Thursday is a decisive day for the EUR area. The press conference of the ECB should not surprise book regarding the statement to be published, but the session of questions / answers will be monitored under the microscope, "say analysts at BNP Paribas in a note. 

Mr. Trichet should be asked about the massive purchase of government bonds by the ECB, as was done in the United States and Great Britain, they say. Meanwhile, the Greek 10-year yields continued to rise: they amounted to 10.477% at 11:30 (0930 GMT), against 10.025% Wednesday evening at 1600 GMT. 

They had reached a week ago their highest level since the entry of Greece into the EUR area, to 11.142%. 

Greek rates at 2 years amounted to 15.146% 14.420% against the previous evening, a sign of fear on the future of Greece in the very short term. 

As regards Spain, who directed a program requirement Thursday, the 10-year rate progressed slightly to 4.272% against 4.196% Wednesday. 

Spain has successfully lifted Thursday 2.345 billion EUR in treasury bonds to five years, at an average rate of 3.532%, higher than in the previous issue, but satisfactory given the financial situation of the country.

 Irish rates were 5.627% against 5.563 % on the previous evening and those of Portugal to 10 years 5.855% 5.762% against the previous evening. Lisbon has successfully Wednesday to raise 500 million EURs of treasury bills six months, but at a rate four times higher that obtained in March.

EUR NEWS: The EUR rise against the USD in a market wait before Greece

The EUR rise Wednesday against a USD weakened by disappointing U.S. data, the market adopting a wait-your four days of general elections in Greece, crucial to maintaining the country in the eur area.
Around 1800 GMT, the eur bought 1.2598 USD against 1.2502 $ on Tuesday at 2100 GMT.

The eur rose against the yen also at 99.91 yen against 99.44 yen on Tuesday.

The USD lost ground against the Japanese currency to 79.30 yen against 79.52 yen yesterday.

The greenback ran a small bout of weakness on Wednesday following the release of alarming statistics for the force of the world's largest economy with the announcement of a sharper than expected decline in producer prices and lower sales of details in the U.S. in May.

The eur benefited from his side of the adoption of a more serene, "wait" according to Nick Brennenbroek, head of currency strategy for Wells Fargo, citing in particular the influence "of rumors that European nations could consider a relaxation of the austerity measures imposed on Greece "after the parliamentary elections Sunday, signals bode well for keeping the country in the eur area.

Traders were concerned that in the event of victory of the Greek radical left, opposed the austerity plans intended by the donors of the country in exchange for their help, Athens does not honor its commitment to continue reforms, eventually forcing the country to leave the eur zone.

French President Francois Hollande, however, warned on Wednesday against the Greeks an output of the eur area in case of non compliance with their commitments, in an interview to Greek TV channel Mega.

"I realize that voters (Greek) must have full sovereignty but I must warn them that  if the impression is given that the Greeks want to get away from the commitments that were made and abandon all prospect of recovery, then there will be countries in the eur area who prefer to finish with the presence of Greece in the eur area, "he said.

For other analysts, the single currency benefited from hopes "to see central banks around the world, not only in Europe but also in the United States and China, come to the rescue" of economic growth , as noted by Huber, an analyst at ETX Capital.

Indeed, the analyst, "with a worsening global economic outlook and levels of higher and higher borrowing rates for countries of the periphery of the eur area, (central banks) may no longer have a choice and have to act quickly and decisively before the situation escalates. "

The rate of bond yields to 10 years in Spain and Italy and remained very high, above 6%, while the 7% threshold is seen by many observers as unmanageable.

The Spanish rate even reached a record high Tuesday since the creation of the eur area, to 6.756% before easing slightly.

Persistent source of concern, the rating agency Fitch had lowered the rating of Tuesday 18 Spanish banks, after lowering the eve of one of the two largest, Santander and BBVA, and the notes of Spain last week.

This reduction was speaking just days after the announcement of a European assistance to a maximum of 100 billion eur in the Spanish banking sector, which received a mixed reception in the markets, investors fearing a heavier ultimately furthers the indebtedness of the country.

Around 1800 GMT, the British pound fell against the eur at 80.92 pence per eur, and stabilized against the greenback at 1.5564 USD.

The Swiss franc remained stable against the eur at 1.2008 Swiss francs to the eur and gained ground against the greenback at 0.9531 Swiss francs to the USD.

The Chinese currency finished at 6.3689 Yuan against one USD for 6.3705 Yuan yesterday

EUR NEWS: The EUR against the USD continues, but the disbelieve spreads in eur area

The EUR was maintained against the USD Tuesday, despite the lowering by Fitch 18 new Spanish banks that fueled doubts about the effectiveness of European aid plan, while the suspicion was spreading other countries in the euro area.

Around 1800 GMT, the EUR bought 1.2497 USD against 1.2482 USD at 2100 GMT Monday.

The EUR was up slightly against the yen at 99.25 yen against 99.13 yen on Friday.

The USD steadied against the yen at 79.42 yen against 79.43 yen on Friday night.

"It's hard to be optimistic about the EUR these days, while the elections approach in Greece and the Spanish interest rates continue to rise," noted Mary Nicola, strategist at BNP Paribas New York.

In Greece, a victory Sunday in the radical left could indeed cause a renegotiation of the austerity measures implemented to satisfy the conditions imposed by donors of Greece and precipitate out of the country in the EUR area.

In addition to performance against Madrid-bond market, the weakness of the EUR has been "exacerbated by the lowering" notes Tuesday 18 Spanish banks by rating agency Fitch, said Michael Hewson, analyst at CMC Markets, shortly after the Monday of the degradation of the two largest, Santander and BBVA, and the note of Spain last week.

For him, "European leaders continue to look like blind men, groping in the dark looking for a solution to the debt crisis that hit Europe", without announcing specific details, and thus fail not reassure currency traders.
Greeted with relief after the announcement of a European aid up to € 100 billion to address the Spanish banking sector, financial markets, on Monday, was seized by doubts about the effectiveness of these measures and increased pressure on the European currency.

Indeed, the markets' fear above all that (the aid plan) requires even more pressure on debt and the Spanish government "and thus" exposes investors to a greater risk of loss, "observed Lee Hardman, analyst at Bank of Tokyo-Mitsubishi.

And mistrust was being extended to Italy, the third largest economy in the EUR area, which displays a huge debt of more than 1,900 billion EUR (120.1% of GDP at end 2011). Revenue in the crosshairs of the markets, its ten-year bond rates is ironed Monday above the symbolic threshold of 6%.

Finally, the crisis also threatens to spread to Cyprus, including banks, highly exposed to Greece, may also need external support as "the Cypriot government for 12 months just to borrow in the market and investors increasingly skeptical of the ability (the country) to repay its debts, "noted Philip Ryan, an analyst at Currencies Direct.

Around 1800 GMT, the British pound rose against the EUR at 80.27 pence per EUR as against the greenback at 1.5566 USD.

The Swiss franc was stable against the EUR at 1.2009 Swiss francs per EUR as against the greenback at 0.9610 Swiss francs to the USD.

The Chinese currency finished at 6.3705 yuan against one USD for 6.3692 yuan yesterday.