Moody s downgrades six German bank groups

Moody’s downgrades six German bank groups. Moody’s has takes multiple actions on German banks’ ratings; most outlooks now stable. Moody’s German bank action means long-term debt and deposit ratings for six groups and one German subsidiary of foreign group have declined one notch. Moodys’ rationale for German bank downgrade: “driven by the increased risk of further shocks emanating from the euro area debt crisis.”

EUR/USD
Range: 1.2455 – 1.2516
Support: 1.2421
Resistance: 1.2520

Euro-dollar closed in NY at 1.2452, the rate recovering off a late pullback low of 1.2425 in line with US equities. A continuation of this recovery faltered as Moody’s announced a downgrading of Austrian banks, then six German banks on both announcements rate dipped to 1.2440, meeting decent demand interest at this level before pushing higher. Release of stronger than expected Australian GDP data provided a boost to risk, though sales of euro-aussie provided a partial counter as euro-dollar was pulled higher by the rally in aussie-dollar. Once the euro-aussie sales faded the rate was able to move through 1.2500, despite supply seen from two Asian sovereign names, cited for the move above 1.2510 as the rate extended recovery to 1.2516. The rate held above 1.2500 into early Europe. Offers now seen from 1.2520 through to 1.2550 with stops above.

GBP/USD
Range: 1.5377 – 1.5438
Support: 1.5380
Resistance: 1.5440

Cable closed in NY at 1.5385, just off late recovery highs of 1.5388 with move up aided by euro-sterling extending its corrective pullback off earlier highs of 0.81405 to 0.8089. Cable initially dipped back to 1.5375 before edging higher, the recovery led initially by euro-dollar. The move up was given a lift, as risk in general was boosted by the release of stronger than forecast Australian GDP data, cable pushed to a high of 1.5433. Euro-sterling was taken back above 0.8100 in Asia, the rate correcting from 0.8091 to 0.81095. Cable offers seen placed from 1.5433 to 1.5440, more into 1.5450 with stops above. Stronger offers noted into 1.5465, a break to expose 1.5525. Support 1.5380-1.5370. Euro-sterling offers 0.8115-0.8120, support 0.8090-0.8080.
USD/JPY
Range: 78.61 – 78.95
Support: 76.50
Resistance: 79.00

Dollar-yen closed in NY at 78.75 having been shoved to a recovery high of 78.97 as market reacted to FinMin Azumi’s post teleconference comments suggesting he had been given the go ahead to counter ‘extreme FX moves’. The rate corrected back to 78.56 before settling between 78.70-78.80 into the close. The rate initially marked overnight lows at 78.60 into Asia, reacting to a generally softer dollar, but rate quickly picked up fresh demand that returned rate toward Tuesday’s high, topping out at 97.95 before settling back on 78.80. Offers remain on approach to 79.00 with bids seen between 78.60-78.50. Suggested 77.50 is now key level to any triggered intervention.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.