EUR declines below 1.1200 ahead of Catalonia's elections

Tuesday, September 22, 2015

The euro declined sharply for a third consecutive session today and dropped below 1.1200 against the USD, hovering around 1.1180. There was some relief in the markets regarding the Greek elections as the new coalition government seems to have alleviated some long-term concerns regarding the recent bailout programme and economic stability. However, market participants remain cautious ahead of this weekend’s elections in Catalonia, Spain, as the local government is looking to make this a separatism ballot with a possible clash with the Spanish national administration. European equity markets remained in negative territory this morning as the DAX, CAC, IBEX and London equity benchmark indices retreated between 0.25% and 0.85% in early trade.   

The USD index initially rallied above 96.0 against a basket of currencies this morning but gave back part of earlier gains and hovered around 95.80. Base metal prices remained under pressure in early trade as copper retreated over 1.5% towards $5,180 and aluminium dropped towards the $1600 area. Lead, nickel, tin and zinc extended declines this morning, retreating between 1.10% and 2.30%. Precious metals edged higher with gold climbing towards $1,140/ounce and silver holding above $15.

EURUSD declines below 1.1200

EURUSD Curncy (EUR-USD X-RATE)   2015-09-22 09-10-50

Asian equity markets climbed higher and posted solid gains overnight. The Hang Seng index extended gains towards 22,000 after gaining over 1%, while the Shanghai Composite Index climbed higher 0.90% towards 3185. Japanese equity markets are closed for the Autumn Holiday and will reopen on Thursday 24th September. 

Market participants will be keeping an eye on the release of the US FHFA house prices index, Richmond Fed and consumer confidence data for direction. The release of UK Public Sector Net Cash requirements data (PSNCR) will also draw investors’ attention.

XAU - Gold hovers around $1140

XAU Curncy (Gold Spot   $_Oz )  D 2015-09-22 09-08-26

 

Events for today:

0930

UK

Aug

PSNCR & PSNB

1400

US

Jul

FHFA House Price Index

1500

US

Sep

Consumer Confidence

1500

US

Sep

Richmond Fed

 

All times UK Local Time

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