The safe-haven yen was on the defensive and the euro stood firm in early trade on Tuesday as anxiety over the Ukraine crisis ebbed for the time being.
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The small bounce in equities on Wall Street should be over and traders would be wise to look at short positions and lock in profits, Riccardo Ronco, technical analyst at Aviate Global told CNBC. European markets meanwhile, were "heading into a full bear market," he added.
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Renewed concerns about the euro zone sovereign debt crisis weighed on the euro in Asia on Wednesday, while the dollar also struggled after minutes of the U.S. Federal Reserve's Aug. 9 meeting bolstered expectations for more stimulus.
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Debt-talk drama is likely to put markets on the defensive next week. Plus, a third of the S&P reports earnings, including Boeing, Ford and ExxonMobil, and the first look at Q2 GDP.
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The euro hovered just above a record low versus the Swiss franc on Monday and fell on the dollar, staying under pressure ahead of this week's decision by the Greek parliament on whether to back austerity reforms demanded by international lenders.*
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The euro is gaining and stocks are following the single currency higher, but investors should avoid chasing the risk-on trade according to one analyst.
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