Euro hits 9-year low due to Greek political uncertainty

Monday, January 05, 2015

The euro remained under heavy pressure and plunged towards 1.185 against the US dollar in early trade this morning, hitting its lowest level since March 2006. It has slightly rebounded from heavy losses, holding above 1.195 at the time of writing. The political uncertainty in Greece weighs heavily on market sentiment, while the main focus remains on the upcoming Greek elections on 25th January.

EURUSD hits 9-year low

EURUSD Curncy (EUR-USD X-RATE)   2015-01-05 08-41-47

ECB President Mario Draghi warned that deflation was still unlikely, but it couldn’t be ruled out as Draghi warned over the outlook of European economies. His comments triggered expectations of a possible more aggressive quantitative easing package at the next ECB policy meeting. European equity markets opened lower this morning, as the CAC, DAX, IBEX and London equity benchmark index retreated between 0.3% and 0.5% in early trade.  

Japan’s Markit/JMMA manufacturing PMI declined to 52.0 in December compared to 52.1 in November. Vehicle sales fell -8.8% in December versus a drop of 13.5% the previous month. The Nikkei slid lower during the first trading session of 2015, retreating 42.06 points (-0.24%), following the tepid macroeconomic data. The Hang Seng index extended losses by 136.50 points (-0.57%) to finish the session at 23,721.32.    

Precious metals climbed higher in early trade this morning, as gold surged 0.7% towards the key area of $1,290/ounce and silver rose over 2% breaking above the $16 area.

WTI front month futures plunge towards 51.0

CL1 Comdty (Generic 1st 'CL' Fut 2015-01-05 08-42-36

On the other hand, crude oil prices remained under heavy pressure, as Brent front month futures extended losses towards $55/barrel, while WTI futures retreated below $52 per barrel this morning. The sharp sell-off in the oil market continues while the strong USD adds further pressure to an already bearish oil market. The USD index hit a high at 91.58 this morning, against a basket of currencies.

USD index surges above 91.2

DXY Curncy (DOLLAR INDEX SPOT)  2015-01-05 08-41-32

 

Events for today: 

 

0500

JP

Dec

Markit/JMMA manufacturing PMI

0500

JP

Dec

Vehicle Sales

0800

DE

Dec

CPI

0930

EZ

Jan

Sentix Investor Confidence

0930

UK

Dec

Markit/CIPS Construction PMI

2350

JP

Dec

Monetary Base

 

All times UK Local Time

 

More from: Myrto Sokou