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A sense of optimism
From Currencies Direct blog, 4 month ago, Read 0 times. Similar articles
A sense of optimism looks to be filtering through markets at present. This derives from hopes that the European authorities will be able to ring fence Greece and steer clear of a much deeper and wider contagion to other eurozone peripheral countries than has already taken place. This may involve a European version of the US Troubled Asset Relief Program. A variety of other methods are being considered including covered bond purchases from the ECB, provision of 12 month liquidity by the ECB, a...
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Sentiment lurches from despair to euphoria
From Currencies Direct blog, 4 month ago, Read 0 times. Similar articles
The huge gains in stock markets around the world yesterday were not mirrored in by corresponding moves in the currency markets, which saw only modest gains for Sterling against the Dollar and Euro. European politics continues to drive sentiment between euphoria and despair as first a Greek deal looked to have been reached, before this morning we find out there is still huge disagreements between member states over details of plan. The Euro ship is lurching from side to side as traders and...
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Markets calm amid default rumours
From Currencies Direct blog, 4 month ago, Read 0 times. Similar articles
The Forex markets were calm in yesterdays trading day as traders and investors alike attempted to interpret the rumours surrounding a Eurozone bailout package that started over the weekend. Stories have been popping up about a ?1.7 trillion fund which would be aimed at saving the Eurozone and allow Greece to default on its £340bn debt pile. This would involve propping up the banks that have invested in Greek bonds so that a controlled bailout can begin on the ailing country. Further plans...
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Dollar gains continue
From Currencies Direct blog, 4 month ago, Read 0 times. Similar articles
The Greenback is gaining all the time given the current environment of increased risk aversion as seen in rise of USD speculative positioning over recent weeks.
One would think there is still ample scope for risk aversion to deepen but what does this mean for the Dollar' The USD index is currently trading just over 78 but during the height of the financial crisis it rose to around 89, a further gain from current levels of around of around 14%.
The main barrier to additional Dollar potency in...
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Spain reintroduces the Wealth Tax
From Currencies Direct blog, 4 month ago, Read 0 times. Similar articles
As anticipated, the government recently approved the reintroduction of the unpopular wealth tax, which has been suspended since April 2008. This could be bad news for people with assets totalling more than 700,000?, excluding the value of their primary residence up to a value of 300,000?.
However the new legislation will please many since, in its original version, people with net assets of as little as 108,000? apart from a primary residence to the value of 150,000?, could be hit by the wealth...
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Stick or twist
From Currencies Direct blog, 4 month ago, Read 0 times. Similar articles
Last night, the Federal Reserve announced its latest efforts to stimulate their ailing economy with two new ?twists' yet stopped short of declaring an additional phase of quantitative easing. The FED will buy $400bn worth of long-term Treasury securities by the end of June next year, funded by selling the same amount in short-term paper. In the statement that followed the FOMC's decision to, as expected, leave interest rates on hold at the historical low level of 0.25%, the FED were negative in...
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Further QE'
From Currencies Direct blog, 4 month ago, Read 0 times. Similar articles
Today we get to see if any other members of the MPC have joined Adam Posen, long time advocate of further easing by the Bank of England, in calling for another bout of QE. The timing of the BOE minutes, coming after the IMF announcement yesterday, could not be better for the Government who are coming under pressure to reassess Plan A (Austerity) and allow more flexibility if the economic growth needed for success fails to materialise. Indication that the Bank of England is considering further...
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Italy downgraded
From Currencies Direct blog, 4 month ago, Read 0 times. Similar articles
The Dollar index remains strong, however it seems doubtful that the Greenback is being bought on its own virtues but rather on weaknesses in Europe. Nevertheless, dollar sentiment looks to have turned a corner for the first time since last summer as long positions have risen, suggesting a change in attitude for the currency. Obviously there are risks to the USD including the possibility of QE3 being announced at this week's FOMC meeting but this is highly unlikely.
On the contrary, the reversal...
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Greece under the spotlight
From Currencies Direct blog, 4 month ago, Read 0 times. Similar articles
Greece will once again be the key driver in the markets for the week ahead as inspectors assess whether the Greek economy is on schedule to meet its debt obligations due next month and so avoid a default. European Union and IMF inspectors are set to hold a conference call today with the Greek finance minister. Doubts are growing that Greece are still not doing enough to align with the financial assistance provided. Politically the pressures are growing with Angela Merkel the German chancellor...
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Central banks ease dollar funding fears
From Currencies Direct blog, 4 month ago, Read 0 times. Similar articles
Yesterday saw the world's main central banks announce joint action to provide Dollar liquidity, aimed at securing the funding needs of banks struggling to meet them in the market. Funding markets had been showing signs of stress, with several measures at their highest level since the financial crisis. The loans will have three month maturities in contrast to the normal one week limit in central bank market operations so banks are given time in the run up to the end of the year to finish window...
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