Ipek Ozkardeskaya
Swissquote Bank Ltd
Appetite on Wednesday was limited on both sides of the Atlantic Ocean. In the US, the crowded economic data brought no surprises. The Federal Reserve (Fed) December cut expectations strengthened, the US yields and the dollar retreated while appetite in major US indices remained limited.
In Europe, the Stoxx 600 extended losses, and not only because of Trump’s tariff threats, but also on the rising unease in French politics, where Marine Le Pen, the far-right leader - who gained ground in the latest elections, remember? – threatened Michel Barnier’s administration – that’s doing its best to control the country’s deteriorating finances and deficit – that she would bring his government down with a no-confidence vote if he doesn’t respect their budget demands.
Thank God, the growing French headache remains localized, for now. The EURUSD rebounded well past the 1.05 level – and even advanced near 1.0590 yesterday, following the other majors up against a broadly weakened US dollar. The worsening political scene in France and the widening yield gap between France and Germany, could however limit the single currency’s upside potential along with clashing opinions from the European Central Bank (ECB) members about how fast the bank should cut rates.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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