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""But the source also said the ECB had no plans to buy the bonds of other countries, even though it was the rise of Italian and Spanish yields to 14-year highs this week that has alarmed policymakers""

 

Tonight is going to be extra specially interesting---forget worrying about the US employment stats, Europe is in just as much strife as is the US---the Italian and Spanish economies are near basket cases, apparantly both Italy and Spain require IMMEDIATE money transfusions

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FRANKFURT, Aug 4 (Reuters) - The European Central Bank resumed buying government bonds from the market and offered a new round of funding to commercial banks on Thursday in response to a worsening euro zone debt crisis.

 

But analysts said the intervention was unlikely to ease market tensions for long and some were worried by ECB President Jean-Claude Trichet's suggestion that official interest rates could rise further, would put more pressure on weak economies in the region.

 

"It is true that we are experiencing a high level of uncertainty, not just in the euro zone," Trichet said after the central bank's monthly monetary policy meeting, which left its main policy rate flat at 1.5 percent.

 

The ECB's decision to resume its emergency bond-buying programme, which had been suspended since March, was a major step for the central bank. Some of its policymakers dislike the programme intensely for compromising the ECB's core mission of controlling inflation, and Trichet acknowledged the decision to resume buying was not unanimous in the ECB Governing Council.

 

As he spoke, traders reported the ECB had entered the market to buy the bonds of Ireland and Portugal, pushing down their yields by about 0.2 percentage point at one stage. A European Monetary Source confirmed the intervention to Reuters.

 

But the source also said the ECB had no plans to buy the bonds of other countries, even though it was the rise of Italian and Spanish yields to 14-year highs this week that has alarmed policymakers.

 

 

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Looking at the AUD/EUR cross an interesting chart pattern has evolved.(can,t post at present due to going down the Apple road). After a prolonged consolidation,a major move of the AUD upwards against the EURO appears increasingly likely. Above 0.788 and we should be off to the races.Maybe that 7 Series Beemer is affordable.
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The EURO---about to stage a turnaround?

 

If it does--why?--when all else has failed thus far

 

Very possibly because tonight the FED/FOMC may either say it is going to support some form of European/US QE action, or even better actually announce some immediate QE.

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""""There are many scenarios which could play out and they do not all mean the EURO is headed for the trash pile."""""

Said a fellow member in the Gold thread, at this point the EURO isn't going to be consigned to history, however one particular scenario does need to be enacted, and enacted quick sharp---btw: EURO up=GOLD up IMO!

post-20731-1323754226_thumb.jpg

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Compared to the Euro, our Aussie Battler has just about regained the High it held 12 months ago:

 

post-20537-1323765818_thumb.jpg

But over the past 3 years, it has grown stronger, picking up about 50% in value.

 

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And that puts the comparison into perspective, which I view as follows:

  • Given that global markets rate Australia one of the most stable economies, we may well - long-term - use the AUD as benchmark.
  • On that basis, the Euro has considerably lost strength, which should have alerted Forex players that all wasn't well in Euroland.
  • Crisis talks by Europeans throughout 2011 may have accounted for some transient improvement, but the effect didn't last.
  • The recent waves have gone sideways, but the last breakout comes off a Higher Low and made already a Higher High.
post-20537-1323766526_thumb.jpg

Maybe the Eurolanders would be well advised to buy AUD. A 4% interest differential can only sweeten the deal still further.

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""""There are many scenarios which could play out and they do not all mean the EURO is headed for the trash pile."""""

Said a fellow member in the Gold thread, at this point the EURO isn't going to be consigned to history, however one particular scenario does need to be enacted, and enacted quick sharp---btw: EURO up=GOLD up IMO!

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Reviewing this conversation of yesterday, one is now forced to ask--Have all central banks decided to abandon the EURO and all that goes with it--in fact is GB correct and wise in not getting involved?

 

IMO the very fact that no Central Bank has decided to actually DO anything meaningfull must be concerning, seemingly the only CB who can do something before Christmas has to be the ECB, but what are the chances?

 

btw: Expect consequentially---- at some point Gold in USD's to decouple itself from the EURO.

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