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It was a tale of two halves yesterday with the dollar rallying and European equities plummeting in the morning after Trichet\u2019s traffic light comments. The second half of the trading day saw the declines in the euro and sterling reduced following the announcement by Reuters<\/a> of the deal between Greece and the EU\/IMF. Today\u2019s trading could see more of the former type environment as credit markets continue to tighten and the austerity vote must still take place in the Greek parliament before a significant rebound in higher yielding assets may be seen.<\/p>\n <\/span>Today\u2019s Economic Data Releases:<\/p>\n EUR \u2013 German Ifo Business Climate \u2013 08:00 GMT GBP \u2013 BOE Governor King Speaks \u2013 09:30 GMT USD \u2013 Core Durable Goods Orders m\/m \u2013 12:30 GMT
\nExpectations: 113.6. Previous: 114.2.
\nA dip in the business outlook is expected but this report may be overshadowed by the EU economic summit that is taking place today in Brussels. The next key milestone in Greece is the new austerity measures the nation must approve in order to receive the new EU\/IMF package. Political risks remain for the euro and the currency may come under pressure before the weekend. Look for the EUR\/CHF to continue to make new all-time lows below the 1.2000 mark.<\/p>\n
\nBoth sterling and the short sterling futures contracts reflect new assumptions for BOE rates in 2012 as the BOE meeting minutes<\/a> this week showed downside risks remain for inflation with the former plummeting and the latter shooting higher. A late day rally saved cable from closing below 1.6000 while yesterday\u2019s daily low coincides with the support from the late March low. The next significant support is found at the late January low of 1.5750.<\/p>\n
\nExpectations: 1.0%. Previous: -1.6%.
\nToday\u2019s data release is expected to show stronger business spending but the current short term trend remains in favor of the greenback amidst a risk adverse environment. EUR\/USD<\/a> support is found at the June low of 1.4070 and a break here could test the May pivot at 1.3970. The 1.4400 level may be is the first resistance where the 20 and 50-day moving averages meet.<\/p>\n