Tuesday, 30 Nov 2010

Euro Drops On All Fronts

The euro fell more than 1% on the day against the dollar on Tuesday, taking a further beating due to speculation that other euro zone countries may follow Ireland down the bailout route. The EUR is currently trading lower against the USD by nearly 100 pips at 130 levels. It is also trading lower against the CHF.

The premiums investors demand to hold Spanish and Italian sovereign bonds over German debt hit their highest since the euro's launch and some of the region's "core" debt issuers, including France, were pressured. An 85 billion euro deal for Ireland, agreed by European Union finance ministers on Sunday, failed to stop euro zone peripheral bond yields rising sharply on Monday, reflecting a lack of confidence the deal would contain the euro zone's debt crisis.

Tomorrow, forex traders cannot afford to overlook, a batch of data is expected from the leading economies. Both the U.S ADP Non-Farm Employment Change and Manufacturing PMI will be released at 13:15 GMT and 15:00 GMT respectively, promising an extremely volatile trading day. Traders should take advantage of this unique opportunity and use the volatile market in order to capitalize profits.