| 0.8047 | |
| 0.7990 | |
| 0.7960 | |
| Stop | 0.8072 |
| R3 |
| 14th July Low |
| R2 |
| Yesterday?s Short Entry |
| Pivot |
| Yesterday?s Low |
| S2 |
Source: http://www.fxstreet.com/technical/forex-signals/fx-strategies-for-majors/2011-07-29.html
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STORY LINK Exchange Rate Forecast - GBP, EUR, USD, AUD, NZD
TAGS: American Dollar Forecasts Australian Dollar Forecasts Currency Predictions New Zealand Dollar Forecasts Pound Sterling Forecasts
POUND STERLING
The Pound weakened in trade this morning against the majority of majors. The most notable fall was a move to 1.2904 vs the Swiss Franc. The outlook for the Pound remains decidedly bearish despite the slight recovery this afternoon. This retracement represents a focus shift to more urgent matters occurring in the US. NEAR-TERM OUTLOOK ? NEUTRAL - NEGATIVE
US DOLLAR ? The Pound Dollar exchange rate (GBP/USD) is 1.6461
As discussed this morning, the main event was the Q2 GDP figures from the US at 1330. The growth figure was tepid at best with the annualized 1.3% figure coming in well below median forecasts calling for a 1.8% expansion in growth. The EUR/USD pair gained a cent in an hour and the cable pair GBP/USD has jumped 2 cents in the past two hours and is still rallying as we come to the close. Slower job growth as well as an almost non-existent move to income is holding back the US economy and could therefore potentially support the argument for a third round of QE. NEAR-TERM OUTLOOK ? NEUTRAL TO NEGATIVE.
EURO ? The Pound Euro exchange rate (GBP/EUR) is 1.1442
This morning?s Euro-Zone CPI estimate came in at 2.5%, slightly under the expected 2.7%. This is the lowest reading since February and means that the ECB may well hold on any further rate hikes for the near term. The ECB?s target inflation rate is 2% and as price growth comes back towards this target the ECB will be far less inclined to raise rates further in such stagnant growth conditions. NEAR-TERM OUTLOOK ? NEUTRAL TO NEGATIVE
AUSTRALIAN DOLLAR ? The Pound Australian Dollar exchange rate (GBP/AUD) is 1.4974
The Australian Dollar has rapidly retraced moving up 2.5 cents against the Pound back to 1.50. This is an aggressive move in a short space of time as we see wild swings in risk based sentiment. We would expect a move back towards the lows next week as the markets settle down. NEAR-TERM OUTLOOK ? NEUTRAL TO POSITIVE
NEW ZEALAND DOLLAR ? The Pound New Zealand exchange rate (GBP/NZD) is 1.8765
The New Zealand dollar maintains a position of remarkable strength against most of the majors, we would argue that it could be over extending and we may see some retracement before further downside. NEAR TERM OUTLOOK ? NEUTRAL To NEGATIVE
Source: http://www.currencynews.co.uk/forecast/20110729-649_exchange-rate-forecast-gbp-eur-usd-aud-nzd.html
Just to introduce a bit more uncertainty into the equation, Nancy Pelosi says that House Democrats will meet on Monday and there is a possibility that some or all might not be able to support the bill.
Choppy trading conditions in the FX market and it?s likely to stay this way for the next 24 hours.
Source: http://feedproxy.google.com/~r/forexlive-rss/~3/yHPLlfi_xVk/
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| 0.8047 | |
| 0.7990 | |
| 0.7960 | |
| Stop | 0.8072 |
| R3 |
| 14th July Low |
| R2 |
| Yesterday?s Short Entry |
| Pivot |
| Yesterday?s Low |
| S2 |
Source: http://www.fxstreet.com/technical/forex-signals/fx-strategies-for-majors/2011-07-29.html
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Source: http://feedproxy.google.com/~r/forexlive-rss/~3/pv2IMVM3ZFc/
NZD/USD rose 140 pips from daily lows and currently is testing record highs around 0.8760. The Kiwi bottomed earlier, minutes after the release of US GDP data at 0.8620 but rebounded and changed abruptly is daily bias. Currently quotes at 0.8750, a 30 pips gain on a daily basis. Support from current levels could be located at 0.8700 and below at 0.8675 and 0.8640.
The Kiwi is outperforming the other commodity currencies. NZD/CAD soared 150 pips in the last hours and rose from 2-day lows at 0.8200 to 0.8355, reaching the highest level in four years. AUD/NZD plummeted from levels on top of 1.2600 to 1.2548, 2-day low.
Against the Dollar, the Aussie is back to the same price level it had at the beginning of the Asian session. AUD/USD bottomed at 1.0908 but rebounded rising almost a hundred pips to test daily highs above 1.1000.
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Source: http://www.fxstreet.com/news/forex-news/article.aspx?storyid=342adbfe-6616-4c17-8711-1d97bc787952
STORY LINK Exchange Rate Forecast - GBP, EUR, USD, AUD, NZD
TAGS: American Dollar Forecasts Australian Dollar Forecasts Currency Predictions New Zealand Dollar Forecasts Pound Sterling Forecasts
POUND STERLING
The Pound weakened in trade this morning against the majority of majors. The most notable fall was a move to 1.2904 vs the Swiss Franc. The outlook for the Pound remains decidedly bearish despite the slight recovery this afternoon. This retracement represents a focus shift to more urgent matters occurring in the US. NEAR-TERM OUTLOOK ? NEUTRAL - NEGATIVE
US DOLLAR ? The Pound Dollar exchange rate (GBP/USD) is 1.6461
As discussed this morning, the main event was the Q2 GDP figures from the US at 1330. The growth figure was tepid at best with the annualized 1.3% figure coming in well below median forecasts calling for a 1.8% expansion in growth. The EUR/USD pair gained a cent in an hour and the cable pair GBP/USD has jumped 2 cents in the past two hours and is still rallying as we come to the close. Slower job growth as well as an almost non-existent move to income is holding back the US economy and could therefore potentially support the argument for a third round of QE. NEAR-TERM OUTLOOK ? NEUTRAL TO NEGATIVE.
EURO ? The Pound Euro exchange rate (GBP/EUR) is 1.1442
This morning?s Euro-Zone CPI estimate came in at 2.5%, slightly under the expected 2.7%. This is the lowest reading since February and means that the ECB may well hold on any further rate hikes for the near term. The ECB?s target inflation rate is 2% and as price growth comes back towards this target the ECB will be far less inclined to raise rates further in such stagnant growth conditions. NEAR-TERM OUTLOOK ? NEUTRAL TO NEGATIVE
AUSTRALIAN DOLLAR ? The Pound Australian Dollar exchange rate (GBP/AUD) is 1.4974
The Australian Dollar has rapidly retraced moving up 2.5 cents against the Pound back to 1.50. This is an aggressive move in a short space of time as we see wild swings in risk based sentiment. We would expect a move back towards the lows next week as the markets settle down. NEAR-TERM OUTLOOK ? NEUTRAL TO POSITIVE
NEW ZEALAND DOLLAR ? The Pound New Zealand exchange rate (GBP/NZD) is 1.8765
The New Zealand dollar maintains a position of remarkable strength against most of the majors, we would argue that it could be over extending and we may see some retracement before further downside. NEAR TERM OUTLOOK ? NEUTRAL To NEGATIVE
Source: http://www.currencynews.co.uk/forecast/20110729-649_exchange-rate-forecast-gbp-eur-usd-aud-nzd.html
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THE earthquake and tsunami that hit northeastern Japan on March 11, and the nuclear crisis that followed, have had an impact on nearly every corner of the economy, perhaps none more directly than the tourist industry. The number of foreign visitors has plunged 50 percent since the triple disasters, according to the Japan National Tourism Organization.
But four months on, travelers are trickling back. Most are business travelers, adventure seekers and bargain hunters, a type of visitor not often associated with Japan, where a sushi dinner can wipe out a week's savings.
The view of Japan as a high-priced playground is what kept Erin Conroy and Jenny McMeans, friends from New York City, from visiting. But this spring, they found round-trip tickets to Tokyo on airfarewatchdog.com for just $600, about half what they normally cost, and booked a room in a hostel for 2,600 yen (about $33 at 79 yen to the dollar) a night. Suddenly, Japan was affordable, even with the yen near record highs against the dollar.
"We felt like, in many ways, Tokyo was on our too-good-to-be-true list," said Ms. Conroy, who was walking with Ms. McMeans around Tsukiji, home to the world's biggest wholesale fish market, one recent Saturday.
And what about the danger of radiation? Ms. Conroy and Ms. McMeans said they perused travel advisories and were convinced that they would not be exposed to high levels of radiation. "My parents were more worried than we were," Ms. Conroy said.
Travelers seem to be gauging the safety of visiting Japan in different ways. Some rely on blogs that have posts written by foreigners living in Japan or frequent travelers to the country. Many, like Ms. Conroy and Ms. McMeans, turn to government advisories. The State Department says that "while the situation at the Fukushima Daiichi plant remains serious and dynamic, the health and safety risks to land areas which are outside a 50-mile radius of the Fukushima Daiichi nuclear power plant are low." In Britain, the Foreign Office advises against travel to the parts of northeastern Japan hit by the earthquake and tsunami, and to within 37 miles of the reactors in Fukushima. But "the situation in Japan outside of these specific areas has largely returned to normal and most visits are trouble free," the office said.
Some visitors said that if the risks were truly great, governments would advise against traveling to Japan, which has not been the case. "I felt I had to do my own homework because the Japanese have a stiff upper lip about these things," said Jack Jaffe, who last month visited Tokyo on business from Los Angeles, where he works for a Japanese electronics company. "But I checked the U.K. and U.S. Web sites and both essentially said the same thing: That outside the zone near the reactors, things are O.K."
Still, skepticism remains about the Japanese government's handling of the crisis, including its ability to monitor radiation levels in the air, soil and water. The government has lifted many of the bans on the sale of milk and some vegetables, but abnormal levels of radiation have been found in green tea leaves grown in Shizuoka, and some contaminated beef recently found its way into restaurants and shops. But these are largely viewed as isolated instances. In its fact sheet on food and water safety in Japan, the American embassy in Tokyo states that "the Government of Japan is taking appropriate steps to ensure the safety of the food and water supply."
Given the doubts, the decision to visit has turned into a proxy of sorts on how the rest of the world views Japan. For some would-be visitors, no amount of reassurances or discount airfares could persuade them to visit now.
"We've had two aftershocks in the last couple of weeks, and I get e-mails from clients almost immediately asking if it's safe to visit," said Daniel Simon, the general manager of the Four Seasons Hotel Tokyo at Marunouchi, where bookings are down 50 percent. Mr. Simon said he tells customers that Tokyo has some of the most earthquake resistant buildings in the world and that the city is far from the reactors in Fukushima. But "we don't really think the high-end leisure traveler will come back until Chinese New Year 2012 because there's still too much negative news in the media about Japan."
Fears are so pervasive that arrivals at the Kansai International Airport in Osaka, 360 miles from Fukushima, fell 47 percent in May. "I've been asked half a dozen times whether I'm afraid of the radiation," said Ed Kornhauser, a pianist from San Diego who has traveled from Osaka to Okinawa since May. "A lot of hostel owners tell me tourism is way down. They want to know why foreigners aren't coming."
Mr. Kornhauser said he felt comfortable visiting Japan because he knew he would be far from Fukushima. Despite the fears expressed by his friends, he was reassured after reading the State Department's Web site. "After the earthquake, I didn't think twice," he said. "My friends blew it out of proportion. This is a fairly big country."
But confidence can be fragile when it involves radiation. So hotels, including high-end places like the Okura and the Imperial in Tokyo, have tried to entice visitors with discounts of up to 50 percent. Deals also abound for tours, which has helped lure back visitors from Hong Kong and other places in Asia. "It's less crowded now, and package tour prices are down 20 to 50 percent," said Masaki Hirata, the executive director of marketing and promotion at the Japan National Tourism Organization.
Some hoteliers are attempting to directly reassure customers that their inns are far from trouble. Kisaburo Minato, who runs the Kimi Ryokan in Tokyo, recently wrote on his inn's Web site that "the emergency at Fukushima is being exaggerated in the foreign press" and that except in the area near the reactors, "life goes on as normal."
Indeed, little has changed in Tokyo, except for the energy conservation measures that include turning up thermostats on air-conditioners. In Sendai, the closest big city to the earthquake's epicenter, restaurants, hotels and shops downtown are open for business. It is only when visitors go to the neighborhoods within a couple of miles of the Pacific Ocean that they see the impact of the tsunami.
Still, many tourists are erring on the side of caution, said Ellie Colin, who handles corporate and leisure travel at the Ovation Travel Group in New York. One client, she said, canceled a $62,000 trip.
"The headlines were really bleak and every single day they got more and more nervous," said Ms. Colin, who has not booked any leisure trips to Japan since. "My feeling is that it's going to take until next year and some really good P.R. out of Japan before leisure travelers return."
First published on July 31, 2011 at 12:00 am
Source: http://www.post-gazette.com/pg/11212/1164257-37-0.stm?cmpid=lifestyle.xml
STORY LINK Foreign Exchange Rates : Currency Predictions - GBP, USD, EUR, AUD, NZD
TAGS: American Dollar Forecasts Australian Dollar Forecasts Currency Predictions Euro Forecasts New Zealand Dollar Forecasts Pound Australian Dollar Forecasts Pound Dollar Forecasts Pound Euro Forecasts Pound New Zealand Dollar Forecasts Pound Sterling Forecasts
POUND STERLING
The Pound has sold off steadily from its 1.6436 high against the Dollar. Data from The Confederation of British Industry has helped to further illustrate the problems with a slowing economic recovery and it is now likely that the BoE will come under increased pressure to restart the Quantitative Easing program and therefore extend past the current �200Bn mark.
NEAR-TERM OUTLOOK ? NEUTRAL - NEGATIVE
US DOLLAR ? The Pound Dollar exchange rate (GBP/USD) is 1.6349
US law makers are still struggling to find any common ground on how to resolve the escalating US debt crisis. The USD has continued to be sold off against most of its major counterparts and has now reached all time lows against the antipodes (AUD & NZD). It is argued that the debt deal is perhaps further away than ever despite the threat of any default and subsequent ramifications. We would therefore expect ongoing USD weakness in trade moving into the weekend.
NEAR-TERM OUTLOOK ? NEUTRAL TO NEGATIVE.
EURO ? The Pound Euro exchange rate (GBP/EUR) is 1.1392
The single currency has depreciated against both the Pound and the USD on Greek Bailout news. Fears of contagion seem to flare at a moments notice as investors nervously take protective positions. It is surprising how far the Euro has advanced against the Pound and the Dollar this week and we could now be seeing a technical retracement helped by the ongoing concerns.
NEAR-TERM OUTLOOK ? NEUTRAL TO NEGATIVE
AUSTRALIAN DOLLAR ? The Pound Australian Dollar exchange rate (GBP/AUD) is 1.4831
The Australian Dollar has advanced for the second day in a row moving to a low of 1.4803 against the Pound. The AUD has gained on recent unexpectedly strong inflation figures. The figures have stoked the fire for interest rate policy. Consumer Price Index figures put the annual growth price growth rate at 3.6% to mark the highest reading in CPI for 2 � years. Previously the markets expected an interest rate cut in the coming weeks. Over-night index swaps now indicate that investors expect rate to remain on hold for the next 12 months.
NEAR-TERM OUTLOOK - POSITIVE
NEW ZEALAND DOLLAR ? The New Zealand Dollar exchange rate (GBP/NZD) is 1.8807
The New Zealand Dollar has reached record highs today falling to 1.8717 vs the Pound 1.1411 vs the Dollar. The gain in the NZD is no great surprise as the Kiwi gains currently on both good and bad global news. It is the safest play amongst all of the major commodity currencies and looks set to continue strengthening on expected rate hikes from the reserve Bank of New Zealand.
NEAR TERM OUTLOOK - POSITIVE
The Fed Beige Book comes out with disappointing statements about the economy and the markets panic! Big losses in all 3 major indices, and worries about more. Don Dawson joins the show to share his views on the commodities markets, ans where there are trading opportunities. Last time Don was on the show, he was focused on a divergence between the Dow and Copper that ultimately dropped the market about 10% before it moved upward. Now Don sees something similar, but where?!
Click on the image below to download the mp3 file:
Most of these buildings date back to a period between 1985 and 1995, when the city had just four commercial zones extending from Ashram road, and including part of Sabarmati, Madhupura and Kalupur.
Recently the AMC sealed the buildings - Kalagi and Sudama - in Ellisbridge area because the owners had shown their commercial properties and hotel as residential bungalows.
"Starting a commercial activity in a residential zone requires that you either open a bank or a nursing home. So there were many buildings in the west zone which were shown as nursing homes. The second aspect was related to parking. You could get a parking space of 13.75 square metres per car for a nursing home and bank and so many buildings on CG road were registered as nursing homes," said a senior town planning official.
The official added that when the new GDCR norms came into effect, the width of the roads decided whether the space would be allotted to a commercial complex or residential apartment.
"Today you cannot have any commercial activity near a road up to nine metres wide. A road that is between nine and 12 metres wide would allow mixed land use while an 18 metre wide road would allow only commercial activity. Despite the new GDCR laws in place, there are many buildings without permissions," the official said.
| 0.8047 | |
| 0.7990 | |
| 0.7960 | |
| Stop | 0.8072 |
| R3 |
| 14th July Low |
| R2 |
| Yesterday?s Short Entry |
| Pivot |
| Yesterday?s Low |
| S2 |
Source: http://www.fxstreet.com/technical/forex-signals/fx-strategies-for-majors/2011-07-29.html
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Big name companies reported earnings today with very mixed results, however all of them were overshadowed by the urgency of the Debt Ceiling. Justin Krebs joins the show to talk about how he sees the debt ceiling as opportunity for traders, as long as they know where to put their money. Merlin and Justin look at several currency pairs which offer great opportunities regardless of which way the markets head as pressure builds. Swiss Franc, Pound, Yen, Euro and the dollar all have prospects if the trade is set up correctly!
Click on the image below to download the mp3 file:
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STORY LINK Foreign Exchange Rates : Currency Predictions - GBP, USD, EUR, AUD, NZD
TAGS: American Dollar Forecasts Australian Dollar Forecasts Currency Predictions Euro Forecasts New Zealand Dollar Forecasts Pound Australian Dollar Forecasts Pound Dollar Forecasts Pound Euro Forecasts Pound New Zealand Dollar Forecasts Pound Sterling Forecasts
POUND STERLING
The Pound has sold off steadily from its 1.6436 high against the Dollar. Data from The Confederation of British Industry has helped to further illustrate the problems with a slowing economic recovery and it is now likely that the BoE will come under increased pressure to restart the Quantitative Easing program and therefore extend past the current �200Bn mark.
NEAR-TERM OUTLOOK ? NEUTRAL - NEGATIVE
US DOLLAR ? The Pound Dollar exchange rate (GBP/USD) is 1.6349
US law makers are still struggling to find any common ground on how to resolve the escalating US debt crisis. The USD has continued to be sold off against most of its major counterparts and has now reached all time lows against the antipodes (AUD & NZD). It is argued that the debt deal is perhaps further away than ever despite the threat of any default and subsequent ramifications. We would therefore expect ongoing USD weakness in trade moving into the weekend.
NEAR-TERM OUTLOOK ? NEUTRAL TO NEGATIVE.
EURO ? The Pound Euro exchange rate (GBP/EUR) is 1.1392
The single currency has depreciated against both the Pound and the USD on Greek Bailout news. Fears of contagion seem to flare at a moments notice as investors nervously take protective positions. It is surprising how far the Euro has advanced against the Pound and the Dollar this week and we could now be seeing a technical retracement helped by the ongoing concerns.
NEAR-TERM OUTLOOK ? NEUTRAL TO NEGATIVE
AUSTRALIAN DOLLAR ? The Pound Australian Dollar exchange rate (GBP/AUD) is 1.4831
The Australian Dollar has advanced for the second day in a row moving to a low of 1.4803 against the Pound. The AUD has gained on recent unexpectedly strong inflation figures. The figures have stoked the fire for interest rate policy. Consumer Price Index figures put the annual growth price growth rate at 3.6% to mark the highest reading in CPI for 2 � years. Previously the markets expected an interest rate cut in the coming weeks. Over-night index swaps now indicate that investors expect rate to remain on hold for the next 12 months.
NEAR-TERM OUTLOOK - POSITIVE
NEW ZEALAND DOLLAR ? The New Zealand Dollar exchange rate (GBP/NZD) is 1.8807
The New Zealand Dollar has reached record highs today falling to 1.8717 vs the Pound 1.1411 vs the Dollar. The gain in the NZD is no great surprise as the Kiwi gains currently on both good and bad global news. It is the safest play amongst all of the major commodity currencies and looks set to continue strengthening on expected rate hikes from the reserve Bank of New Zealand.
NEAR TERM OUTLOOK - POSITIVE
WASHINGTON (MNI) ? The Congressional Budget Office late
Friday said a revised Senate debt-hike plan would save $2.2
trillion to $2.4 trillion over 10 years and includes a multistep
process for raising the debt ceiling in the future:
Analysis of the Impact on the Deficit of the Budget Control Act of
2011 as Revised in the Senate
July 29, 2011
Letter to the Honorable Harry Reid
Summary
The Congressional Budget Office (CBO) has estimated the impact on
the deficit of the Budget Control Act of 2011, as proposed in the Senate
on July 29, 2011. The legislation would:
* Establish caps on discretionary spending through 2021, including
separate caps on new funding for war-related activities;
* Allow for certain amounts of additional spending for ?program
integrity? initiatives aimed at reducing the amount of improper benefit
payments and enhancing compliance with tax laws;
* Make changes to the Pell Grant and student loan programs;
* Reduce certain payments to agricultural producers;
* Establish a procedure for increasing the debt limit by $416
billion initially and subsequent procedures that could allow the limit
to be raised in two additional steps, for a cumulative increase of as
much as $2.4 trillion;
* Reinstate and modify certain budget process rules; and
* Create a joint Congressional committee to propose further deficit
reduction.
In total, if appropriations in the next 10 years are equal to the
caps on discretionary spending and the maximum amount of funding is
provided for the program integrity initiatives, CBO estimates that the
legislation would reduce budget deficits by about $2.2 trillion between
2012 and 2021 relative to CBO?s March 2011 baseline adjusted for
subsequent appropriation action. As requested by your staff, CBO has
also calculated the net budgetary impact if discretionary savings are
measured relative to its January baseline projections. On that basis,
CBO estimates that the legislation would reduce budget deficits by
slightly more than $2.4 trillion between 2012 and 2021.
The version of the legislation proposed in the Senate on July 29,
2011, contains several differences from an earlier version that was
proposed in the Senate on July 25, 2011. In particular, the more-recent
Senate version of the Budget Control Act of 2011:
* Reduces the caps on new discretionary funding in 2020 and 2021 by
$1 billion for each of those fiscal years;
* Contains revised language related to program integrity
initiatives aimed at reducing overpayments of certain federal benefits
and improving compliance with tax laws;
* Removes provisions governing spectrum auctions and related
spending;
* Changes the procedures for increasing the debt limit,
substituting a multistep process for the earlier single increase in the
debt limit; and
* Includes other small changes that would have no impact on
estimated budgetary effects.
** Market News International Washington Bureau: 202-371-2121 **
[TOPICS: M$U$$$,MFU$$$,MCU$$$,M$$CR$]
Source: http://feedproxy.google.com/~r/forexlive-rss/~3/3SPsu-akCL4/
Currency Trading Forex Signal Service Forex Currency Forex Signals
STORY LINK Foreign Exchange Rates : EUR Suffers on Moodys Warnings, GBP USD poised to make further gains
TAGS: American Dollar Forecasts Australian Dollar Forecasts Daily Currency Updates Euro Forecasts Pound Australian Dollar Forecasts Pound Dollar Forecasts Pound Euro Forecasts Pound Sterling Forecasts Pound Yen Forecasts
The Pound Euro exchange rate (GBP EUR) is 1.1365. The Pound Dollar exchange rate (GBP USD) is 1.6353. The Pound Australlian Dollar exchange rate (GBP AUD) is 1.4776. The Pound Yen exchange rate (GBP JPY) is 127.0170
Earlier in the week we considered the likelihood of a US Debt default, the general consensus in the market was that after ongoing discussions a solution would be met and the debt ceiling would be raised. The process of raising this limit must be passed by congress and has actually happened 11 times in the past 10 years without much concern. US Debt has always been considered one of the safest types of global debt for this reason yet now looks far more concerning.
The US Treasury has a constitutional right to issue bonds to raise funds to fund government expenditure. The problem is congress mandates the debt ceiling at any point in time and must agree if the limit is to be extended. It seems with the current deadlock that Congress could now let the solvency deadline pass with potentially disastrous consequences.
If the Treasury defaults we can expect to see serious ramifications, the primary concern would be global debt contagion. US Debt has previously been considered a risk free asset and has therefore always been considered as the benchmark risk free rate. Alternate risker asset classes are compared to this benchmark rate when investors consider risk to reward ratios. If the so called safest asset class defaults we would expect to see some serious risk aversion and a subsequent sell off in financial risk.
The effects on the currency markets would be substantial, safe haven currencies such as the Swiss Franc would rally further inline with safe haven commodities such as Gold. Riskier antipodean currencies such as the AUD could weaken as traders wind in carry trades.
Euro Zone sovereign debt fears returned to the spot light yesterday afternoon. Moody's rating agency warned that a second Greek bailout could set a precedent in the EMU for credit negative bailouts, whilst mounting concerns that EMU nations will struggle to reach their targeted 3% growth rates. The market reaction to the concerns expressed by Moody's was that the ECB may well now hold a neutral stance on interest rates into next year. We could therefore see a second round of Euro selling pressure moving towards the weekend.
For other live currency exchange rates and a currency converter see the currency news website.
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