Europe’s Vigour Fades, America Takes the Reins

By GG Analyst in Reviews 0 Comment

EUR/USD

The single currency fell below 1.30 yesterday and didn’t manage to recover in the course of the day. Some treat such a sudden sale of the euro as a consequence of investors’ disappointment in Merkel’s decision not to expand the size of the EFSF. Others also see the reason in the fact that agreements which were negotiated and signed by the heads of European states during the EU summit are still to be approved by the governments. And this issue is not that simple. But there is one more factor – the fall of liquidity at the end of the year. more…

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…

Draghi dragged the euro down

By GG Analyst in Reviews 0 Comment

EUR/USD

Mr. Draghi bitterly disappointed the financial world on Thursday. Yes, the key interest rates were lowered by a quarter of a point to 1 percent. But, alas, there’s no “shock and awe” over the troubled countries’ bond purchases. There hasn’t been even a single attempt to play with the laws and find some loophole. ECB is perseveringly sticking to its guns: “We have a treaty and Article 123 prohibits financing of governments. It embodies the best tradition of the Bundesbank. We shouldn’t try to circumvent the spirit of the treaty.” After that statement markets immediately went down and the demand for 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…

S&P: handle it or everyone will be in trouble

By GG Analyst in Reviews 0 Comment

EUR/USD

Germany and France took the initiative to make certain alterations to the EU Treaty and introduce automatic penalties for violation of budgetary discipline. The positive effect of this will consist in the earlier supply of the states in need of bailout with money. In his speech Sarkozy tried to convince the public that France and Germany would pay out their debts in full. We heard the same from Greece less than two years ago, but now even the Bank of England estimates the probability of debt restructuring in Greece at 100%. S&P, the most daring rating agency, announced that if there more…