The euro regained some of its composure after falling for most of the week, although its upside was limited due to continuing problems in Greece and Spain. Greece continued to dominate the headlines as yet another attempt to form a government was unsuccessful, this time by the radical left party leader Alexis Tsipras. The mandate now shifts to Evangelos Venizelos’ party Pasok, which came third in the election. Some people may remember him as the finance minister who negotiated the EU bailout pact along with the then president Lucas Papademos.
Also driving down the common currency were Spanish banks. Hoping to put an end to a four-year banking crisis, Spain's government effectively took over Bankia SA, one of the country's biggest banks, late on Wednesday after days of market anxiety over the lender's solvency.
The euro rose early this morning following better-than-expected French data, which showed a 1.4% gain in manufacturing production for March from a previous decline of 0.9% in February. The Italian data was also ahead of expectations, with industrial production for March increasing by 0.5%, exceeding consensus estimates for a 0.1% gain.
Across the Atlantic, the market will be watching the weekly US initial jobless claims closely to see if there are any improvements in the embattled labour market. The data is due at 1.30pm (London time) and median forecasts on a Bloomberg survey point to a reading of 369,000 for the week ending 5 May. That's 4000 higher than the prior week's reading of 365,000. Investors may also grasp clues about the future of Fed monetary policy this afternoon, as Fed chairmen Ben Bernanke will deliver a speech at 2.30pm (London time).
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