By FX Empire.com
The pair showed a decline on Thursday trading as hopes Greece and Italy are close to achieving political stability damped haven demand on the dollar.
After Prime Minister Silvio Berlusconi offered to step down after the approval of the austerity measures needed to cut the euro area’s second-largest budget shortfall, Fabrizio Cicchitto, head of the parliamentary group of Berlusconi’s People of Freedom, said his party is discussing the formation of an interim government led by former European commissioner Mario Monti as well as early elections, providing hopes the debt-mired economy will find political stability soon. In addition, Italy sold today 5 billion euros of one-year treasuries with yield of 6.087 percent, the highest since 1997, where after the auction the yield on 10-year bond eased below 7%.
On the other hand, The Greek President’s office said on Thursday that Lucas Papandemos, a former ECB vice-president, will lead the new crisis coalition and they will be sworn in on Friday at 12:00 GMT.
Furthermore, optimistic data from the U.S. added positivity to the sentiment as trade deficit narrowed to 43.1 billion pounds in Sep. from the revised 44.9 billion pounds in August, and initial jobless claims for the week ended Nov. 5 retreated to 390,000 from 400,000.
On the other hand, SNB Vice President Thomas Jordan said on Tuesday the franc remains overvalued and the bank is ready to intervene at any time if needed, yet the bank is still resisting calls from government ministers and labor unions to raise the franc cap against the euro. On
Friday, the week ends with the release of U.S. University of Michigan confidence, at 14:55 GMT, which is estimated to slide to 60.0 in Nov. compared with the prior reading of 60.9. The data may to have an impact on the pair, yet the main focus will remain on the latest developments from the euro zone.
Originally posted here
