Spanish Prime Minister Mariano Rajoy has already passed spending cuts and tax hikes worth slightly more than 60 billion euros over the next two years, but half-year figures show the 2012 deficit target slipping from view as tax income forecasts will not be hit due to economic contraction.
The euro slid against the dollar late in the New York session on Tuesday, pressured by a late fall in stocks and commodities as investors grew cautious about developments in debt-plagued Spain.
The compression of EUR longs continues its course amid heavy JPY crosses, driven mostly by a risk averse atmosphere, with the escalation of violent protests in Spain - reminiscent of those in Greece - the main factor to blame. Current price stands at 100.32. New lows looming in Asia?
Technically, following a brief drive thru 101.00 in early US trade, the topside failure has led the pair to expose Europe lows again at 100.15, which coincides with the 38.2% retrace of the Jul-Sep advance. Break lower paves way to 100.00 round figure ahead of 99.50 - Sept 13 low -. On the upside, sustained fluctuations above 101.00 are needed to regain bullish hopes.
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