Despite the outcome of Spain’s election which sent Mariano Rajoy, the Prime Minister, back into the seat of power, the Euro was able to hold its own. According to exit polls in Spain, the People’s Party failed to win a majority of seats in Parliament meaning that the Prime Minister could have some difficulty in putting through much needed economic reforms. Without them, the threat of financial instability to the Spanish economy, increases. Spain, as the 5th largest E.U. economy, is important to the overall growth of the Eurozone. For FX investors, it seems, though the economic future is uncertain for Spain, they’d prefer to take a wait-and-see stance as it regards the common currency.
As such, and as reported at 11:03 am (GMT) in London, the EUR/USD was flirting with today’s opening price and trading at $1.0865, down 0.02%. The pair has ranged from $1.0849 to $1.0885, a relatively tight band for this volatile pair. The EUR/GBP was trading at 0.7297 Pence, a gain of 0.13% and edging closer to the session peak of 0.7300 Pence.
US Data Could Drive Next Fed Decision
Though the Christmas holiday on Friday generally makes for a light trading week, there are still a few high impact events occurring. Among them is tomorrow’s third release of 3rd quarter GDP growth for the US economy which could solidify expectations of the next Fed rate increase if the numbers are upbeat. US Durable Goods orders could also impact the US Dollar and its crosses if the release on Wednesday misses analysts’ expectations.
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