EU Morning Report - Irish referendum in the spotlight

The euro (EUR) recorded losses against most of its major counterparts as market sentiment is becoming increasingly negative. Ireland will hold a referendum on whether to accept the eurozone fiscal compact today. A “yes” outcome appears more likely, nevertheless the 16% of undecided voters in the latest polls could change this. The first indications of the result should be expected after 21:00 GMT when the exit polls will be released but final official results will not be announced until Friday afternoon. Italian 10-year bond yields rose to a four-month high of 5.9%, falling short of the bond auction target. Meanwhile, Spanish 10-year bond yields are near a new eurozone high. Versus the US dollar, the euro dropped to 1.2373 from 1.2478 – a near 2-year record low.

The US dollar (USD) appeared strong versus a basket of currencies, as eurozone woes favored the buying of the greenback. The ADP employment report due later today at 12:30 will provide a good forecast on the Non Farm payroll release tomorrow. Versus the Swiss franc (CHF), the greenback rose to 0.9707 from 0.9625. Against the Canadian dollar (CAD), the US dollar rose 1.0302 from 1.0237. A break above 1.0315 is needed for the pair to open the way for higher highs.

Oil prices plunged to 87.01 – a 7-month low - from 90.36 dollars a barrel. Gold (XAU) rose to 1564.56 from 1553.20 US dollars an ounce. Against the euro, gold surged to 1263.92 from 1243.31 euro an ounce. Silver (XAG) moved up to 27.9125 from 27.7525 dollars an ounce. Stay in tune throughout the day with foreign exchange bullets!