EURUSD Holds Ground Ahead of Possible Rate Cut - 30.4.2013

The Euro against the greenback holds well despite that on ECB meeting this Thursday investors are expecting a rate cut, advancing from 1.3034 to upside hurdle at 1.3120. The common currency strength could be explained by successfully ending the 2-month political deadlock in Italy and forming a new government, led by Enrico Letta, with Italian 10 year bond auction covered by 1.4 at 3.94% yield the lowest since November 2010. Nonetheless the US dollar was weaker in the recent trading and perhaps the EURUSD could be higher as US GDP growth reported less than expected and coupled by reducing US CPI raises chances for FED monetary enhancement. Focus now is shifting to Friday NFP that would give further signals of monetary direction.

Elsewhere, FX pairs were mainly steady trading. The USDJPY recovered from support at 97.35 to 98.20 as Japan earlier today reported lower than expected Unemployment rate at 4.1% in March from 4.3% in February but Retail Sales were disappointing. US Indices yesterday closed higher, making a new record high for S&P 500 by gaining 0.72% to end at 1,593.61. The latter underpinned Asian shares as S&P/ASX 200 closed also higher by 1.28%, Hang Seng advanced by 0.68% but NIKKEI 225 slightly dropped by 0.17%.