Mike Paterson’s daily Forex brief
Meeting over the week-end, the G20 countries have put further pressure on the Eurozone countries, especially Germany, to increase their own contributions to the bailout fund if it wants help from the rest of the world. Both sides agreed that it would be re-assessed in March before any further G20 commitment to add funds via the IMF.
Nothing too outrageous in this but it confirms there is still some way to go before the IMF and therefore the endangered Eurozone countries get any more outside money, and the markets have shown a good degree of caution still.
EURUSD failed in an attempt to get above the next key resistance at 1.3500 and has fallen back to 1.3430. Likewise GBPUSD had a look at 1.5900 but has eased back, meaning that EURGBP has done very little since Friday.
USDYEN had a further move higher to 81.67 before falling back on some short-term profit taking and this has also capped the Euro’s rise as EURJPY was sold too.
Meanwhile in this morning’s Daily Telegraph, UK Chancellor Osborne has admitted that there’s no money left to help boost growth and repeated that tax cuts are not the way out of the mess. He will however be considering a rise in the lowest tax threshold as measures to stimulate growth becomes as much an in-house political as well as economic war of words. Little impact on the Pound at this time but expect Budget Day on 21 March to become more of a focal point.
Overnight in Australia Kevin Rudd failed in his leadership challenge to existing PM Julia Gillard but in itself this has been enough to unsettle the Aussie $ and we’ve seen it weaken a little v USD and also JPY and GBP amongst others.
Little in the way of data today to kick off the week so expect some usual Monday shadow-boxing.
And talking of sport what a great feast we had over the weekend, unless of course you support the Shrimpers, Scotland, Cardiff, Spurs or………….!
Have a successful week everyone.
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