Mike Paterson’s daily Forex brief
There’s been little change in prices as Eurozone countries consider raising the debt firewall to â‚¬700 billion ahead of this week’s summit on March 30-31, with Germany, albeit through gritted teeth, now seemingly agreeing that this may be the way forward.
Quite how the extra money will be raised is once again a game of smoke-‘n-mirrors but there is a consensus to make it happen and this has put a little support under the Euro. The temporary European Financial Stability Facility (EFSF), and the permanent European Stability Mechanism (ESM) could be "held operational" for a transition period say Merkel and Finance Minister Schaeuble. Two options are under discussion, one combining the ESM's â‚¬ 500 billion with â‚¬ 200 billion from the EFSF already earmarked for Greece, Portugal and Ireland. The other option would allow the funds to run together at a full combined capacity of â‚¬ 940 billion but latest reports say this is firmly off the table.
EURUSD rallied to 1.3285 but couldn’t break up any higher through strong sell orders and the 1.3300 barrier option that really is now being more of a barrier than some. EURGBP has edged up in a tight range to 0.8368 (GBPEUR down to 1.1949) and appears to have decent support now around 0.8335. EURJPY has moved higher again to 109.69 but EURAUD has fallen back as Aussie $ buyers return to pick up bargains in the dips for the moment at least.
GBPUSD still can’t get back up through 1.5900 and I’m hearing talk this morning of large sell interest around 1.5920, while overall the Pound has barely moved, as traders remain largely clueless still.
Little data out today but we do have Messrs Bernanke and Draghi speaking at separate events this afternoon.
I trust you all had a wonderful time in the sun at the weekend and your team did you proud. For my part a great day’s sailing on the Solent (thanks Clive!) was somewhat dampened upon hearing that the Shrimpers once again conceded a late goal which this time cost them all 3 points and they’ve now dropped to 5th. And to make it worse the 86th penalty was tucked away by an ex-Shrimper!
But our cricketers seem to be heading along nicely reducing Sri Lanka to 139-5 so far on the first day of the First Test, albeit letting them off the hook from being 15-3.
Sunny days, BST, and now TMS to keep me company……What’s not to like on a late-March Monday?!!
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