Market Snapshot – Euro and Dollar in Focus

Stocks Cautiously Bearish

The stock markets were struggling during the London session which was basically a follow up from what we had seen earlier during the Asian session. The main reason was the fact that the slip up in the technology shares, which was seen during the US session yesterday, has continued to weigh on similar kind of stocks in the Asian and the European session as well. The markets are likely to continue in a weak manner in the short term with the tapering talk putting added pressure on the markets for now. The markets also await the advance GDP data from the US later in the day which it hopes would give renewed direction to the currency and stock markets alike.

Dollar the Focus

The euro and the dollar continue to fight it out. Over the last few weeks, we have seen the euro hog all the focus with the tapering talk from the ECB. This led to the euro having a very strong bull run which has continued for the last few weeks. On the other hand, the dollar has been on the backfoot for much of this time and it has been battered mainly due to the bad economic data from the US. But with the data showing signs of recovery, the dollar is back in the focus. The advance GDP data from the US is scheduled to be released later in the day and it remains to be seen whether that continues the recovery in the dollar or whether it comes in weak and exposes the dollar to the market risk.