Pound, Euro Flip-flop after Weak Hungarian Auction

The British Pound is rebounding against theEuro at the mid-session after Hungary’ssmaller-than-expected debt auction renewed sovereign debt concerns in the EuroZone.

The British Pound is rebounding against theEuro at the mid-session after Hungary’ssmaller-than-expected debt auction renewed sovereign debt concerns in the EuroZone.

Early in the session the British Pound wasunder pressure due to concerns about the economic recovery triggered by aweaker-than-expected budget deficit and lower mortgage approvals.

The Bank of Canada hiked its benchmarkinterest rate by 25 basis points this morning. This was in line withexpectations. After holding inside of a tight range most of the morning, theUSD CAD is dropping sharply following a strong rebound in gold, crude oil andequities.

A rumor of a possible intervention by theBank of Japan is helping to boost the USD JPY this afternoon. The rebound inthe stock market is also pressuring demand for lower yielding currencies,thereby adding to the weakness in the Japanese Yen

The EUR USD is trading lower pressured bysovereign debt concerns in Europe following poor demand for Hungary’s debt.Profit-taking ahead of Friday’s release of the European bank stress testsresults is adding to the weakness. Traders are nervous about what the reportwill reveal. Some feel the test wasn’t stringent enough; others feel that itwill show several banks need to raise more capital.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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