Euro news:
The big news for the eurozone is the ban on short selling in the German markets. As to be expected this has had a negative effect on the euro as those wanting to profit from a deteriorating eurozone will move into shorting euro futures contracts. It is quite likely that we will see EUR/US Dollar move into the $1.20 levels in the not so distant future. Current levels show $1.2165 and under pressure with the euro down 0.38% for the day.
More damaging news comes in the form of the hedge fund world shorting the euro to the tune of $1 trillion. This will put tremendous downward pressure on the euro and will face the strongest of headwinds in clawing back losses.
16:30 London time see ECB President Trichet speak, this is not viewed as earth shatteringly important but his comments should give some indication as to where the eurozone is headed. Of late the euro has been subject to volatility due to unexpected comments from various EU ministers, the banning of short selling being just such an example as Angela Merkel came forward by saying that the ban was not discussed at the last EU finance meeting.
Lieberman, McAlinden Discuss German Short-Selling Ban:
Pound news:
For those looking for Sterling to appreciate against the dollar then the outlook does not look too good for the interim. Having hit a 14-month low yesterday there is little to suggest that a GBP/USD recovery is forthcoming. For the next month analysts will be looking towards the budget speech in order to gauge just how severe the budget cuts are likely to be. Too severe and there is no chance of any growth whatsoever, to lax and the markets will take a very negative view on our current deficit levels.
The most recent blow to Sterling gains has been the ban on short selling in Germany as well as weak sentiment surrounding the eurozone. As a consequence the U.K is being compared to other eurozone nations and is feeling the effects of risk aversion from investors. On a positive note Sterling is holding up nicely against the euro, currently trading at €1.1751. The high of the day is not testing the €1.18 level but continued downward pressure on the euro should see €1.18 touched by the end of the week but Sterling may not have the momentum to hold above that level for long.
GBP/USD is looking very weak but will be of no concern for the BoE. At best the weak Pound will improve demand for our exports, just how significant the U.S is as a consumer of our exports is another matter. Sterling is registering as marginally down on USD at 0.16%, hovering just above $1.4300.
US Dollar news:
In the current economic climate it can be viewed as a bad sign if the U.S dollar appreciates with little or no help. If this occurs then we can assume that it is being sought after as a safe haven with investors showing little sign of faith for other securities. Yesterday a key piece of data, building permits, came in weaker than expected. However, this did not lead to a fall in the Greenback versus either Sterling or the Euro. In fact, quite the contrary as this morning sees more weakness as Sterling hits a low of $1.4239 today, currently trading at $1.4340 and down from $1.4404 at 16:30 London time yesterday.
The euro is very much in the same boat as today sees it trading at $1.2207 having been as low as $1.2144 today. Many analysts put a target level of $1.25, then $1.2350 and now $1.20. However, with the ban on short selling in German and a general lack of faith for the bailout the downside for the EUR/USD is now being viewed as potentially unlimited. The U.S dollar is also finding support through a fall in oil prices, as demand drops for the commodity we will see investors move into the currency for better gains.
Against the Canadian dollar the U.S dollar is faring well after the Canadian Central Bank announced that rate hikes are unlikely for the time being. As such CAD/USD is currently trading at $0.9590 and clearly some way off parity.
Today sees the Consumer Price Index at 13:30 London time, as a key marker of inflation anything other than market expectation will see the
Dollar move.
Keiser Report with Jim Rogers: Banks! Bailout! Scandal!
May 21st, 2010 at 11:30 pm
Membership of the EU has destroyed the UK. We were a proud and weathy country 20 years ago – now we are an insignificant and broken island stuck on the edge of Europe. We fought two world wars not to be dictated to from Europe or to speak a foreign language. Yet 80% of UK laws are now made in Brussels and imposed on us with no reference to the British people. Our currency and weights and measures had been in place for 1500 years but we have had British europhiles turn their backs on their own culture and welcome the language of the New Order imposed from Europe while they lined their own pockets. Our borders were dismantled in 1993 so anyone can just walk in and take our jobs, housing, benefits etc. In the next 10-15 years the EU intends to include all nations bordering the Mediterranean including the Middle East and North Africa. Turkey is targeted to be the first Islamic Euro state and that will then ease membership for Morocco, Tunisia, Algeria etc. The EU has destroyed the UK economy, our former self-sufficiency and any hope for our childrens’ future. The sooner this whole rotten EU/eurozone disaster collapses into the obscurity it deserves the better. We are witnessing the collapse of the EU now. Great Britain has always had the capacity to stand up for herself and her people against all attack and adversity. The only hope for our future and our children is to do so again and that will only come from the collapse of the EU.
June 17th, 2010 at 8:07 am
Outsider Code seems to be some sort of bigoted BNP member and would probably be a member of the National Front if they still existed. It is nationalist & rascist behaviour like this that led to the rise of Adolf Hitler and the massacre of millions of innocent people.
What this right-wing idiot doesn’t understand is that it is not Europe that has imposed itself on Britain, rather that Britain chose to distance itself from an international economic alliance that has benefited all its citizens so much that they are now far better off than the average Briton.
Greedy self-centred morons like this have directly led to our banking crisis. They have profited from everyone else by being paid off by our government (i.e. the public) for high-risk property gambles that went wrong. This is the equivalent of betting your life savings on the horses and getting bailed out when you lose. a great job if you can get it. It is equivalent to theft.
If these fascists only realised that money is not wealth we might stand a chance of drawing level with the Euro zone again. Money is a MEANS OF EXCHANGE.It is not wealth in itself. If I locked this Nazi-lover in a room with a Billion Pounds he would have a lot of toilet paper but would soon starve to death. If he studied engineering rather than the back of his own private parts he would at least be able to build himself a bed, maybe a table and chair and possibly keep himself warm by lighting a fire.
What we need in the UK is to rebuild the mighty industries we had before Margaret Thatcher smashed them. We need to lead the world by innovation and production of goods not vile sit on our fat backsides making diatribes against our more productive neighbours while counting our cash.