The US equities were strong overnight with the Dow Jones closing up 109 points while the SP500 index rose 17 points. This is now the fourth consecutive day that the US markets have risen and once again is on the back of investors positive thoughts on the survival of Greece.
As expected Greece’s Prime Ministers new cabinet received the vote of confidence from parliament 155-143. This is seen as a crucial hurdle towards approving the country’s austerity package and restarting the flow of bailout funds which is currently been held by the EU and IMF. Ahead of the vote, acting IMF head John Lipsky said that the program outlined for Greece could work and it would prevent a default.
The EURUSD (see above chart) traded to a high above the 1.4420 level overnight. Currently the EUR is not reacting as positively as expected and is trading below the 1.4385 level. Morgan Stanley on Tuesday scaled back its year end EUR forecast to 1.36 due to Greece-related and economic-growth concerns. This is 0.13 lower than their previous projected level of 1.49 at year end.
The AUDUSD rose to a high of 1.0620 in the US trading session overnight from a low of 1.0532 during yesterdays Asian session after the Reserve Bank said that it would maintain the 4.75% benchmark in the face of a potential worsening European debt drama.
Gold futures locked in its sixth positive day as the dollar weakened on the back of the confidence vote.
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