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EUR/USD update (22nd June 2012, 06:00)

In US trade, the euro lost ground as a synchronised slowdown in global manufacturing activity saw investors shun risk.  

Earlier in the session, eurozone sovereign bonds rallied on reports that the Spanish banks' stress tests would point to 'only' €60 billion in required capital, well below the available €100 billion. Later, the results from consultants Oliver Wyman and Roland Berger came in virtually as estimated – something in the vicinity of €51 to €62 billion. The stress test results also mentioned that the top three Spanish banks would not be required to raise new capital.  However, this ‘good’ news was overshadowed by a synchronised slowdown in global manufacturing activity.  Yesterday’s softer-than-expected HSBC Chinese flash manufacturing PMI print preceded contractionary, and slowing PMI prints in Europe and the US respectively. 
The data served to accentuate the market’s disappointment from the previous day that the Fed had not done enough to provide further stimulus to the US economy, and gave a much needed boost in sentiment.  The slowdown concerns were predictably captured in a sharp bounce in the USD at the expense of the risk currencies, gold, oil and the base metal complex. Having ended yesterday’s Australian session around the 1.2680 level, the euro slumped to close US trade at 1.2540. Upon resuming for Asian trade the euro has strengthened modestly to be currently trading in the low-1.2560s.


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EUR/USD update (22nd June 2012, 06:00)

In US trade, the euro lost ground as a synchronised slowdown in global manufacturing activity saw investors shun risk.  

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