EU Morning Report - Market sentiment improves

The euro (EUR) has been strengthening against most of its major counterparts, one day after the S&P downgraded Spain. The worsening economic conditions, rising unemployment and the uncertainty regarding the government’s intentions for an official bailout request were the key reasons behind this move. German Finance Minister Schaeuble characterized the downgrade as a “misunderstanding”. He also said that the attitude of his G7 counterparts towards Europe has improved significantly. Negotiations between Greece and the Troika are progressing and there are hopes that an arrangement can be reached before the next eurozone summit on the 18^th of October.

§ The Australian dollar (AUD) is still rising versus most of its counterparts, as a softening labor market and the recent rhetoric by the Reserve Bank of Australia (RBA) heightened speculation that the central bank will proceed with another rate cut in November.

§ Silver (XAG) is rebounding over the past two days versus the US dollar (USD) after losing nearly 2 dollars at the begging of the week. The area around 33.55 is expected to act as a support level.

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