Currency Updates:
Euro recovers losses as markets price in risk
The euro (EUR) recovered previous losses versus the US dollar (USD) after markets better priced in the risks associated with the Cypriot bail-in. The pair moved back up to 1.2969, which looks like its new resistance area, before correcting to 1.2935. The debt ridden island nation is expected to come up with a plan B this evening to come up with the EUR 5.8 billion needed to secure a bailout from its European peers. In other news, the Italian government has yet to form a government after three weeks since its elections. The country will play a key role in restoring confidence in the European markets should they come to a swift resolution.
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West Texas Intermediate Crude (OIL), the American standard in crude oil, is moving above 93.07 after yesterday’s US crude oil inventories came out negative.
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The US 500 (SPI), which tracks the 500 biggest listed equities in the US, corrected after reaching all-time highs. The index is currently moving at 1547 after finding strong support at 1530.
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Weekly option volatilities for the EURUSD picked up from 11.85 to 13.95 as investors’ fears exacerbate and push options’ premiums upwards.
