Thanks to some surprise downgrades by Standard & Poors, the euro once again stumbled in yesterday’s trading action. After hitting a high at 1.3024, EUR/USD dropped sharply, falling all the way down to 1.2945, marking a 16 pip loss for the day.
S&P downgraded three large French banks yesterday, citing concerns about the potential for the country to hit another recession. The three large banks that got smacked with a downgrade were BNP Paribas, Credit Agricole, and Societe Generale.
Concerns about Greece and how much additional funding it needs also weighed down the euro. Word in the forex grapevine is that the Troika believes Greece needs between 16 to 20 billion EUR, which is way higher than Greek Finance Minister Stournaras’ estimate of 13 to 15 billion EUR. In addition, it isn’t clear whether or not the Troika will grant Greece the extension it needs to pay out its existing payments.
For today, we’ve only got second tier data due in the form of the GFK German consumer climate report, which is scheduled for release at 6:00 am GMT. Early predictions are calling for the index to print at 5.9, which is pretty much in line with the scores we’ve been seeing the past few months. If the report prints exceptionally better than expected, it could give the euro a small boost at the beginning of the London session.