Despite the fact that the fundamental data in the Eurozone has improved, the Euro did not manage to grow based on the fact that the European sovereign crisis continues to have negative effects upon the currency. The fact is that the market continues to be influenced by a feeling of risk aversion which is mainly caused by the difficult economic situation in the world, especially in the European Union. Even though the fundamental factors have shown positive data for the EU countries this week, the Euro remained flat for a period and started to fall afterwards. The consumer price index in France increased to 0.3 percent on a monthly basis in November, after the previous growth of 0.2 percent which has been seen in October. The ZEW economic expectations index for Germany also increased from -55.2 to -53.8 this month. Also, the same indicator has shown improvements for the entire European zone, growing from -59.1 to -54.1 even Read more »
Posts Tagged: European sovereign debt crisis
The European sovereign debt crisis continues to have major effects upon the trading market, causing the evolution of most of the major currency to fluctuate a lot based on the fluctuations of the trading sentiment.
The most affected currency is probably the Euro, which has finished another bad week. Friday, the Euro rallied a little, but did not have much strength. This rally has been the result of the European Union summit which has brought European politicians together in a new attempt of trying to find solutions to the sovereign debt crisis. This summit has actually brought some solid decisions such as the leverage for the European Financial Stability Facility which “will be rapidly deployed” and implemented by the month of July 2012 by the means of €200 billion which will be provided by the International Monetary Fund. This news has caused the enthusiasm of traders, but the currency did not manage to sustain a long rally. Read more »
The two most important currencies in the world, the Euro and the US Dollar are now faced with quite a difficult period which causes them to fall against most of their major counterparts. The Euro continues to be influenced by the European sovereign debt crisis and its effects, while the US Dollar is falling on the growth of the risk appetite.
The Euro fell as much as hitting the 1.3400 level against the US Dollar, rally which the currency did not manage to maintain, despite the optimism related to the results of the Italian bond auction. This has caused the EUR/USD to fall behind the 1.3400 level, which means that the pair is likely to end the week at a lower level than the one it had started with. This means that all the gains that the Euro has managed to score during the very brief period of optimism have actually been rapidly erased. The optimism was the Read more »
The European Union’s financial crisis continues to be incredibly strong, having a very powerful impact upon the Euro which has now dropped for the 4th week in a row. The European currency decreased especially against safe-haven currencies such as the Japanese Yen or the US Dollar. As well, based on the fact that even the safe-haven currencies are weak at the moment, it seems that the Euro has also fallen against the Great Britain Pound which seems to be the most powerful European currency at the moment.
Moreover, as there are no signs that the European crisis is to end in the near future, the Euro is likely to continue to fall in the near future. The Italian borrowing costs have reached the highest level since 1997, which has once more reinforced the concerns related to the debt crisis. As far as the analysts see it, the spreading of the crisis is now no longer limited to the Read more »
As the situation in the European Union continues to get worse, with the sovereign debt concerns spreading towards other week countries in the EU, the trading market continues to suffer. Risk aversion started to make a new appearance on the market, despite the fact that traders have tried to ignore their concerns for a few days. This has had a negative impact upon the risky currencies which have fallen this week, but it has definitely been in the favor of safe-havens, which have managed to grow due to this new wave of risk aversion.
The Japanese Yen has been growing throughout the week due to these concerns related to the sovereign debt crisis. This growth is especially related to the surging borrowing costs of the European countries which have had the effect on the trading sentiment, causing traders to let their concerns influence their trading once more. Moreover, as it is true that there are not so Read more »
The situation in the European Union seems to be getting worse every single day now. The yield on Spanish bonds increased during today’s auction. Moreover, the Stoxx Europe 600 Index of shares fell by 0.8 percent, this being the third day in a row that the index is actually decreasing. Moreover, Fitch rating has announced that the spreading of the European sovereign debt crisis is likely to have a negative impact upon the US banks, adding the following: “Unless the euro zone debt crisis is resolved in a timely and orderly manner, the broad credit outlook for the U.S. banking industry could worsen.” This has caused the Euro to fall, but, not as expected, this has also generated some risk appetite which has been quite helpful for the Australian and the Canadian Dollar. This may actually be due to the fact that traders may have had enough about the situation in Europe and have decided to turn towards Read more »
The situation in Europe seems to be getting worse, increasing thus the sentiment of risk aversion which started to show again at the beginning of the trading week despite of the fact that it had turned at the end of the previous week. These new concerns have been caused by the increase of the bond yields in some countries and to the bad economic news. If we are to look at the situation at the moment, it is quite obvious that the European Union’s leaders will not be able to contain the sovereign debt crisis especially as financial markets are reacting accordingly.
The element which has determined the increase of the risk aversion feeling is the increase of the bond yields in the Eurozone. It is true for Italy, whose bond yields have continued to grow even though the European Central Bank has actually purchased some of the country’s bonds during the previous week in order to Read more »
The previous week has been dominated by risk aversion, but, at the end of the week, traders’ risk appetite started to grow a little as concerns about Europe seemed to calm down on expectations that the situation in Europe is going to improve once new leaders are going to be chosen. But it seems that this week has brought a new turn on the trading sentiment, causing traders to fell risk aversion once more. This is also related to the concerns related to Europe, which have had a powerful impact on the financial markets today, causing not only banks, but also stocks to retreat. The Italian and Spanish bond yields rise and, as it seems that there is no solution for the problems in Italy, it may be time for the European leaders to start considering taking measures in Spain. Of course, not forgetting about Greece as the country continues to be faced with difficulties.
This situation Read more »
The previous week has been dominated by the risk aversion which started to show on the market due to the situation in Europe. After the resignation of the Greek Prime Minister, the crisis started to really spread towards Italy as well, not only at the financial level, but also at the political one. After the vote which indicated the fact that the Italian Prime Minister, Silvio Berlusconi, is not wanted by the Italian citizens and after the sell of the Italian 10-year bonds, the market started to be dominated by an increasing risk aversion which seemed to calm down just a little at the end of the week. Traders are very concerned by the financial situation in Greece, Italy, Spain and Portugal and by the spreading political crisis, especially as there are rumors according to which Angela Merkel seemed to discuss with the other European leaders the possibility of quitting the unique currency for the Eurozone.
The risk Read more »
Due to the fact that the Economic Situation in Europe has become worse and worse especially due to the fact that the crisis is now also political, not only financial, the Euro finds itself in a very bad situation, reaching the lowest level since the month of August 2010 against the US Dollar and the Japanese Yen and the lowest level since February against the Great Britain Pound. Traders’ concerns regarding the European sovereign debt crisis seem to grow on a daily basis, making the European currency fall more and more, despite its previous rally registered at the beginning of the month.
The yield of the Italian 10-year bonds has decreased by 7.48 percent yesterday, showing that the situation in Greece can and it is spreading. This has caused a very powerful reaction on the trading market as traders are now concerned with the situation in Spain and in Portugal. Moreover, the situation in Italy is becoming worse Read more »