Daily Market Review 9 of May
OVERVIEW

The absence of clarity in the process of forming of the Greek coalition government supports the demand for the Dollar and the Yen and has a negative impact on risky assets. The market reflects the concern of the investors because of the uncertainty in the EU. That’s why the profitability of the bonds of the peripheral states continues to grow putting pressure on the Euro. The other problem that doesn’t add any optimism that by the end of June Greece will run out of funds and after that moment Greece won’t be able to pay the debts.  Apparently all those factors will lead to the depreciation of the Euro. So the amount of buyers of the Euro decreased a lot and they shifted to be the sellers. Apart from Greece Italy and Spain are in focus with their banks issues. No LTRO could fix them and they continue to undermine the positions of the Euro in the market.

CURRENCIES

EUR/USD

Yesterday the Euro depreciated against the US Dollar. If the low of the 7th of May around 1.2954 loses its meaning of support the rate will most likely decline even lower beneath 1.2780. The investors are quite concerned because of the elections in Greece and France. Even though no one made a statement that contradicted the European program of austerity measures there’s no certainty on the market that it wouldn’t happen.



GBP/USD

The Pound was depreciating against the US Dollar yesterday. The correction of the British currency might deepen to 1.5950.  At the moment the currency might be purchased from any level of decline.