Exchanges rates today are bouncing back on hopes that Greek voters will elect a new pro-reform government in fresh election’s set to be held on June 17th. The Aussie dollar has clawed back ground having reached a low of 0.9689 vs. the dollar, while EUR/USD has found support near 1.2500 and is this morning trading closer to 1.2550.
A raft of average data releases last night did little to quell investors looking for bargains and saw equities gain across the board. The Nikkei and Topix in Asia finished up about half a percent in late afternoon trade, while European equities were the best with the FTSE the star performer adding 1.6%. U.S markets finished flat as core durable goods orders disappointed coming in at -0.6% vs. economists estimates for a 1.1% rise in May.
German manufacturing PMI retreated slightly to 45, failing to push back above the key 50 level which indicates expansion. Many European economic indicators now teeter just below 50 and show Europe is still struggling in what proves to be a painfully slow and stubborn recovery. One shining light if there can be any from the recent European Summit is that Germany could be persuaded ‘in time’ to support the notion of Euro bonds. Mario Monti, Italian Prime Minister noted “Europe can have euro bonds soon” – it is in Germany’s interest to keep Greece and all 17 nations in the common currency “anything can happen.”
Greece and the recent surge in negative sentiment in markets has wiped billions of dollars off stock indices worldwide and has seen the Aussie dollar drop below parity against the greenback. While exchange rates today appear to be bouncing, we have a long way to go before we attain a comfortable degree of stability and global growth. Fasten your seat belts.