How the EU trades assets with Greece

The Euro continued to make gains against the USD after a 2^nd tranche of bail out funds for Greece was agreed by Germany, the largest economy in the Eurozone. The EUR/USD was up 0.35%, trading at 1.3444 even though Standard and Poor, the credit ratings agency reduced the credit rating for Greece as ‘selective default’.  This follows on from the Greek government’s decision to include “collective action clauses” attached to its bonds. The added clauses force those holding the bonds to participate in debt restructuring if a voluntary write down of their bonds is not accepted. Investors were however encouraged by both the Greek government and Standard and Poor saying that Greece’s rating will probably be increased once the debt swap deal with private creditors is completed.

The price of Crude Oil dipped slightly in Asian trading having reached a 9 month high earlier in the week. Fears over waning demand from Europe and Asia helped keep a check on the prices and oil was down 0.06%, trading at $108.50 a barrel. Concerns over the escalating tensions in Iran, the world’s 4^th largest oil producer were negated by Saudi Arabia stepping up its oil exports and filling in any gaps left by Iranian oil sanctions.

The precious metals market found support, primarily on the back of a weakened USD. Gold was up 0.15%, trading at 1777.75 a troy ounce, whilst Silver was up 0.21%, trading at 35.680. The weakened greenback was exemplified by the US Dollar Index which measures the USD against a basket of 6 major currencies. In Asian markets, the US Dollar Index was down 0.34%, trading at 78.37.

Today, investors should keep an eye out for:

1.30pm GMT –  USD Core Durable Goods Orders, previous 2.2%, forecast 0.0% – A higher than expected reading should be taken as positive/bullish for the USD.

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