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FRANKFURT (Dow Jones)--The European Central Bank Wednesday declined to comment on financial market speculation that the ECB and other major central banks are preparing to intervene in the foreign-exchange markets to prop up the flagging euro.

 

The talk comes as traders circulate a report from a U.S. think-tank reportedly noting that the Group of Seven leading industrial nations are concerned about the speed of the euro's decline. The report is also said to note that major central banks may be preparing verbal intervention to support the currency "if the rout continues."

 

At 1350 GMT, the euro traded at $1.2320, well above the fresh four-year low of $1.2143 seen in Asian trade Wednesday.

 

ECB Executive Board member Lorenzo Bini Smaghi said in an interview with German business daily Boersen Zeitung, published earlier Wednesday: "Our goal is a strong euro for Europeans, in terms of domestic purchasing power. In order to ensure this strong euro, we look at numerous data, including, of course, the exchange rate, and act in accordance with our mandate."

 

The ECB's key mandate is to maintain price stability, which it defines as an annual inflation rate of just below 2% over the medium term.

 

"We may see a boilerplate statement from officials saying excessive volatility in foreign-exchange markets is not desirable," said Win Thin, a senior currency strategist at Brown Brothers Harriman & Co. in New York.

 

"But actual intervention? Not likely," he said. "Why would the G-7 act now, when the euro is simply moving back toward purchasing power parity, which [the] OECD estimates is around $1.17 currently."

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Market intervention dead ahead--in spit of the above? (AUD below on wrong thread!)

 

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  • 2 weeks later...

We have a EURO crisis--China acts first--FED and ECB to follow--got Gold?

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June 4 (Reuters) - Hedge fund advisor Medley Global Advisors issued a report on Friday saying China is buying euro-denominated assets in order to underpin the currency, causing a slight strengthening against the U.S. dollar, a source told Reuters.The report, titled "China Buying Euros," was seen contributing to the euro rising to $1.2075 from $1.2025 in early New York trade.

 

"China is purchasing euro assets in order to stabilize the euro's decline, according to well placed sources in Beijing," said a source who read directly from the three paragraph Medley report.

 

"Chinese sources indicating a sensitivity to the $1.20 level," the report said, according to the source.

 

According to the report, both Beijing and Washington recognize that an unruly depreciation would have a significant impact on both countries' exports and could then affect the trajectory of their growth rebound.

 

China is therefore likely to remain cautious about exiting from stimulus policies, the report said.

 

In addition, the report said the Bank for International Settlements, which fosters international monetary and financial cooperation and serves as a bank for central banks, was seen in trading in the currency markets earlier on Friday buying euros around the day's low of $1.2019.

 

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Euro Domino's Will Fall Until Currency Is Split: Matthew Lynn

 

WhoÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s next? First Greece went bust. Now Ireland is on the brink of a bailout from the European Union and the International Monetary Fund.

 

When it happens, weÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢ll hear plenty of soothing words about how contagion has been stopped, the euro area has been put on a firmer footing, and the single currency saved. There will be a lot of grand rhetoric about the importance of the European project. Stern condemnations of the speculators will ring out across the continent.

 

DonÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t listen to a word of it. The euro has turned into a bankruptcy machine. Once the markets have finished with Ireland, they will simply move on to Portugal and Spain, and after that to Italy and France.

 

http://www.bloomberg.com/news/2010-11-16/e...tthew-lynn.html

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The European Union and International Monetary Fund will start scanning the books of IrelandÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s banks tomorrow in a prelude to a possible aid package to stem EuropeÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s widening fiscal crisis. U.S. government reports showed today that the increase in consumer prices and housing starts trailed economist forecasts, bolstering the Federal ReserveÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s case that it needs to buy Treasuries to spur growth.

 

ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“ItÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s a bit of a relief bounce,ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ said Quincy Krosby, chief market strategist for Newark, New Jersey-based Prudential Financial Inc., which oversees $690 billion. ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“Investors are realizing that there will be a solution for the Irish situation that wonÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t end up in global contagion.ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ

 

http://www.bloomberg.com/news/2010-11-17/a...-euro-fall.html

 

 

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Welcome to the world of crises---we have another potential Currency crisis pending--the EURO. (IMHO)

 

The question now is: Will the Eurozone have to go down the same path as the FED and really crank up "Quantative Easing"

 

The USD is being smashed by QE, what on earth happens if the EURO suffers the same fate?

 

Debasement or Default---it looks ugly.

 

The last two days for the EURO have been horrific--chart enclosed.

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http://noir.bloomberg.com/apps/news?pid=20...id=a4.ug4w1z4tA

 

 

Nov. 23 (Bloomberg) -- German Chancellor Angela Merkel said the euro is in an "exceptionally serious" situation after Ireland became the second European country to need a rescue after Greece.

 

"I don't want to paint a dramatic picture, but I just want to say that a year ago we couldn't imagine the debate we had in the spring and the measures we had to take" over Greece, Merkel said in a speech to Germany's BDA employers' group in Berlin today. "We are facing an exceptionally serious situation as far as the euro's situation is concerned."

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Here is an update of the USD wren.So far, wren nil---flower 1 --- but there is still a long way to go!

 

"Facts are stubborn things, but statistics are more pliable." ~Author Unknown

Question: Is the USD Index higher or lower than it was in June 2010 (smashed) ------ :icon14: -- :icon14:

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Greece's economic problems are massive, with protests against the government being held almost daily. Now Prime Minister George Papandreou apparently feels he has no other option: SPIEGEL ONLINE has obtained information from German government sources knowledgeable of the situation in Athens indicating that Papandreou's government is considering abandoning the euro and reintroducing its own currency

 

http://www.spiegel.de/international/europe...,761201,00.html

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EURO about to unravel?

 

If Greece goes--Ireland next?

 

Forex trouble dead ahead!

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