Market Review – 16/08/2011 22:04 GMT
Euro pares its gain on disappointing French-German proposal
The single currency retreated on Tuesday as German Chancellor Angela Merkel and French President Nicolas Sarkozy said in a press conference that they did not support the creation of eurobonds or an expansion of the EFSF to contain the debt crisis.
The single currency ratcheted lower from Australian high at 1.4454 on cross selling of euro and fell sharply to 1.4355 in European session on weak German and eurozone GDP data (German and EU Q2 Q/Q GDP growth was 0.1% and 0.2% vs forecasts of 0.5% and 0.3% respectively). However, euro rebounded on weak U.S. data and extended its gain to 1.4473 in NY midday after the German and French leaders announced their conclusions but price retreated swiftly to 1.4377 in NY afternoon as their speech failed to ease worries about the debt crisis.
