Euro Finds Support as Stock Selling Continues

Last week’s Currency Trading Review

The Dollar was under broad based pressure last week as stocks staged a 4 day rally the biggest since May and the Euro and risk currencies surged. Oil Rallied $4 a barrel and the Dow Jones Index reclaimed the key 10000 level on Wednesday with an impressive 300 point gain. US June Services PMI slipped to 53.8 vs. 55.4 previously and confirmed that the speed of the US recovery is stalling. One positive note however was the drop in Weekly Jobless Claims to 454k vs. 475k previously. The Euro was able to move higher on easing Eurozone crisis concerns and talk of solid bank stress tests to be released on July 23. CDS spreads dropped considerable on European banks and Greece adding to the Euro Rally. The ECB held at 1.0% on Thursday and President Trichet commented that some investors were too pessimistic about the future of the EU. The EUR/USD gained +0.59% closing at 1.2640, after opening the week at 1.2565.