S&P Downgrades Greece to “Selective Default” - 28.2.2012

US Dollar Stock markets were mostly higher today as investors were encouraged by better-than-expected economic data from the United States and yesterday’s drop in oil prices. The National Association of Realtors reported yesterday that pending home sales climbed by 2% in January after a revised 1.9% decrease in the prior month, indicating the industry may be improving. Today the data may be somewhat mixed. According to preliminary estimations, the value of durable goods orders dropped in January for the first time in four months by 1%, following a 3% increase in December. At the same time the Conference Board’s consumer confidence may rise to 63 from 61.1 in January. The US dollar lost some ground in Asian trading hours today with the currency’s index sliding to 78.32, compared with yesterday’s close at 78.56. Euro The euro rose above 1.34 against the US counterpart in the morning, despite diving below the level yesterday. The lower house of German Parliament ratified yesterday the Greek aid package, while the Chancellor Angela Merkel said that pushing Greece out of the euro would risk “incalculable” damage for the region. Euro area leaders are expected now to shift their attention to increasing the region’s bailout fund before the summit in Brussels starts on March 1. The euro gained in Asian trading hours today despite the ratings agency Standard and Poor’s lowered Greece’s credit ratings to “Selective Default”, as the government may change conditions of its bond issues even for those investors who are unwilling to accept new terms. The euro rose to 1.3440 against the greenback by the end of Asian trading hours. Canadian Dollar The Canadian currency remains range-bounded against the US counterpart, maintaining levels close to the parity. Yesterday the pair USD/CAD advanced to 1.0050 as crude oil, the nation’s biggest export, fell from a nine-month high at almost 110 dollars to almost 107 dollars per barrel. In Asian trading hours today the pair dropped to 0.9945.