Euro Advanced After Berlusconi Pledged to Quit | IFCM
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Euro Advanced After Berlusconi Pledged to Quit - 9.11.2011

US Dollar Asian stocks gained ground on Wednesday, following yesterday’s gains of the major European and US indices due to a possible resignation of the Italian Prime Minister Silvio Berlusconi. Nevertheless as the debt crisis is far from being resolved, the International Monetary Fund Managing Director Christine Lagarde said that the decade may turn out to be “lost” for the global economy unless nations act together to counter threats to growth. The dollar lost ground against all its major counterparts yesterday as investors boosted demand for higher-yielding assets. In the United States the most representative economy’s index S&P 500 added 1.17%. The dollar index, which tracks the greenback against a basket of six currencies of the major US trading partners, dropped to 76.55 from 77.18. Euro The euro was supported against the US counterpart as Berlusconi pledged to step down after the Italian parliament approves austerity measures, demanded by the EU officials in order to reduce the nation’s 1.9 trillion-euro government debt. The Prime Minister’s decision came after yesterday’s parliamentary vote on the 2010 budget – the results showed that Berlusconi had lost the majority in the Lower House. Before the vote the yield on Italian 10-year government bonds achieved a new euro era high – 6.77%, very close to the 7% barrier, that made Greece, Ireland and Portugal seek international financial aid. In Greece meanwhile the new head of the national unity government may be named as soon as today. The news were taken positively by the markets, sending French CAC 40 index higher by 1.28% and German DAX – by 0.55%. The euro rose to 1.3850 against the dollar. Australian Dollar The Aussie remains almost flat against the US counterpart but weakened against the Japanese yen and the euro ahead of tomorrow’s reports, that may show that unemployment rate in Australia rose to 5.3% in October from 5.2% in the previous month. Nevertheless another report showed today that Australian consumer confidence improved significantly, to the highest level since May, after the Reserve Bank cut interest rates from 4.75% to 4.5%. The data is also showing that home loans increased in September more than economists initially estimates – by 2.2%, leaving more space for economic growth. The Aussie traded this morning at 1.0345-1.0397 against the US dollar.
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