Posts Tagged ‘ECB’

Euro Trades Squarely On News

January 17, 2012 by · 4 Comments
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(As written for My Paper on 17 January 2012 issue. Click here to enlarge)

What a week it has been for the Euro.

Mid-week, ECB chief Mario Draghi gave a press conference, stating that the bank’s policy of extending low interest loans to financial institutions had been successful in stabilizing the region’s credit markets.

Proof of his statement was seen in the recent Spanish and Italian bond auctions, which saw solid demand for their respective paper. In fact, Spain had doubled the size of their offering.

This caused the EUR/USD to rally to 1.2879 on Friday.

However, the party came to an abrupt halt late last week when news about the S&P downgrade of top European nations hit the wire. Read more…

US Likely to Outperform Europe in H1

January 10, 2012 by · 4 Comments
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(As written for My Paper for 10 January 2012 issue. Click here to enlarge)

It’s good to be back in the currency market after a three week break.

For my first article of 2012, let’s take a snap-shot of the world’s biggest economies to see how they fared for 2011. This can give us excellent insight into how they might perform at the start of 2012.

According to the list by the International Monetary Fund for 2011, the top 3 economies (by country) are as follows:

1. USA: USD 15.06 trillion

2. China: USD 6.99 trillion

3. Japan: USD 5.86 trillion

Read more…

Euro Under Pressure

September 13, 2011 by · Leave a Comment
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(As written for My Paper on 13 September 2011. Click here to enlarge)

When Lehman Brothers fell in 2008, the bankruptcy filing of USD640 billion was the largest ever filed in the history of the United States, far exceeding that of Enron and WorldCom.

3 years on, the ghost of Lehman has returned, and the memories of a painful credit crunch are starting to surface yet again.

The 600-pip fall by the EUR/USD has centred around one sentence – “Will Greece default on its payments and exit the Euro?”

As concerns over Greece and contagion fears escalate, European banks have been dealt another blow. A Bloomberg index shows that 46 banks are trading at just 0.58 times book value, the lowest since the post-Lehman lows of March 2009.

This simply means that investors are estimating their assets to be worth just over half what the companies claim. Read more…

Greek default the focus at Brussels

July 19, 2011 by · 2 Comments
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(As written for My Paper on 19 July 2011. Click here to enlarge)

Government leaders in Europe will meet this week in Brussels to discuss the debt crisis again.

One of the key discussions would inevitably be the consequences of a Greek default.
Last Friday, credit-default swaps protecting Greek debt from losses for five years came in at 2,415.07.

According to Bloomberg data, that price signals an 88% chance of default. Read more…

Signs point to slowdown

July 12, 2011 by · 6 Comments
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(As written for My Paper on 12 July 2011. Click here to enlarge)

Last month, I wrote about how the “Forex world” is divided into 3 regions: US, Europe and Asia-Pacific. Hence, to get a snapshot of> what’s going on around the Forex world, we only need to see the stories that unfold in these 3 regions.

Last week, all 3 regions had news which pointed traders to only 1 conclusion: global growth could be slowing.

Let’s have a look at all three news: Read more…