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The euro held onto gains Friday morning.
Written by article default Friday, 30 April 2010 13:07
Market OverviewThe euro held onto gains Friday morning, supported by expectations that details of an aid package for Greece will soon be announced.
First-quarter U.S. GDP data held no surprises and had little impact on the currency markets, with attention focused on the next step in the Greek debt crisis.
European Commission President Jose Manuel Barroso issued assurances following reports that Greece has signed up to a EUR24 billion austerity package that a deal will be finalized "very soon, meaning, in the next days."
U.S. first-quarter real gross domestic product rose at a 3.2% annual rate in first quarter, slower than 5.6% in fourth but mostly on mark compared to 3.3% expected. Consumer spending was up 3.6% versus 1.6% in the fourth quarter. Inventories quarter rose USD31 billion, contributing 1.57 percentage points to GDP.
Major currencies remained steady at earlier levels following a U.S. Chicago Purchase Management adjusted Apr index read of 63.8 Vs Mar 58.8. The euro was at USD1.3334 from USD1.3238 late Thursday. The dollar was at JPY94.25 from JPY94.07, while the euro was at JPY125.69 from JPY124.53. The U.K. pound was at USD1.5286 from USD1.5323. The dollar was at CHF1.0755 from CHF1.0830.
The U.K. currency found some support as opinion showed the Conservatives edging ahead in opinion polls, following last night's final television debate. The more commanding lead could help reduce fears of a hung parliament after next Thursday's general election.
Market expectation
The euro might get a bit of a boost today, amid financial bailout hopes for Greece and an appetite for risk, and as traders square up their positions heading into the weekend, which is also the end of the month.
Some analysts are expressing concern that even the announcement of a package this weekend won't be enough to turn a corner on Greece's problems and lift the euro.
Fears that German politicians will continue to oppose German participation, doubts over Greece's ability to impose austerity measures given the continued civil unrest and concern that there could still be contagion to other euro-zone nations are all likely to ensure that any euro gains are limited and that the single currency could well start sliding again next week.