Euro: Down and Out

By GG Analyst in Reviews 0 Comment

EUR/USD

The wave of the euro sales hasn’t taken long to appear. Already yesterday the single currency dipped close to 1.30 and stopped only 8 points above that level. Once again the movement was caused not by statistical data, but by politicians’ pledges. Throughout the day it became clear that there were certain difficulties in fulfilling those minimum requirements that had been proposed at the summit. The countries were again acting as sovereign states, defending their own interests. The ECB’s representative reminded that the Bank was unable to pursue the same policy as the Fed and couldn’t be a lender of last more…

Rising stakes for the summit: S&P is threatening to cut the ratings of almost all EU countries

By GG Analyst in Reviews 0 Comment

EUR/USD

S&P is threatening to lower the ratings of almost all EU countries and many banks of the region in case ratings of the Euro-Zone countries go down. Stakes on this summit are very high. But now there are some doubts about its successful outcome. Newspapers with reference to some governmental sources say that Germany will oppose an early launching of the additional bailout funds that we spoke about yesterday. Germany assigns primary importance to the fiscal discipline and agrees to come to the rescue only if it is observed. Again and again German politicians make the same mistake: trying to gain more…

New hopes: Europe will create a bigger “bazooka”

By GG Analyst in Reviews 0 Comment

EUR/USD

The single currency withstood the pressure which followed the message from S&P. On Monday night, the rating agency declared that it would send ratings and/or outlooks on 15 of 17 euro area countries for review, if the EU summit this Friday didn’t lead to any significant progress. The euro went down to 1.3330 at a certain moment yesterday. However, later it managed to recover and close the day near 1.34. Now the pair is trading with a small gain near 1.3415. The newswires associate this firmness of the euro with the report in the Financial Times which says that the EU more…

Payrolls turned out to be weaker than expected, but Europe supports the markets

By GG Analyst in Reviews 0 Comment

EUR/USD

As it often happens in our days, Friday’s U.S. labor report contained rather contradictory data. On the one hand, the number of household employees continues to grow under unprecedented rate, having increased by over 278 000. The total number of payrolls almost met the analyst forecasts, reaching 120K against the expected 126K. In addition, data for the previous two months were revised: they went up by over 70K. But there’s no point to be overexcited about falling of the unemployment rate from 9.0% to 8.6% since only one-third of it is due to the employment growth, and two-thirds is caused by more…

Have the central bankers finally saved the world?

By GG Analyst in Reviews 0 Comment

EUR/USD

It’s not a sure thing but the chiefs of the Central Banks and the heads of the governments seem to have come to understanding of each other at last. The former are ready to take more drastic measures, while the latter are looking to more balanced budgets. Of course, they will do one in exchange for another. That vicious spiral (economic downturn – rising budget deficits – tightened credit terms – economic downturn) is very likely to break. On Wednesday we witnessed coordinated actions of the Central Banks. And on Thursday we heatedly discussed Mario Monti’s revelation of the ECB’s intention more…