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: risk aversion
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 concerns related to the sovereign debt crisis in Europe continue to have a very high level, causing the market sentiment to remain negative. This has a very powerful impact upon the trading market, as safe-haven currencies are the only ones to grow on risk aversion. Meanwhile, all the higher yielding currencies are falling.
This is actually the case of the Canadian Dollar, which fell today against some of its major counterparts, although the country’s fundamentals were not all bad. This decline has been caused by the risk aversion which finds its roots in the fall of the bonds in Europe. The borrowing costs of French bonds declined today, reaching a new record low, while the yield on the Spanish securities grew a lot at an auction. However, the Canadian fundamentals are not all bad. The manufacturing field grew by 2.6 percent, reaching the level of $49.2 billion during the month of September. This comes after the 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 problems in Europe continue to get worse as now the crisis is not only affecting the financial sector, but also the political one. The European Union seems to be more divided then ever after the decision of quitting of the Greek Prime Minister which has triggered other chain reactions, the most important of which being that of the resignation of Silvio Berlusconi, the Italian Prime Minister. Berlusconi was in no mood to resign, but it seems that the result of the elections indicated that he is not wanted by the people, thing which actually means that he now has to. Based on this fact, the trading market is now under the effects of a new wave of risk aversion which has caused high yielding currencies to fall, affecting thus the Great Britain Pound and the Canadian Dollar.
The Great Britain Pound has been struggling today despite of the gains registered yesterday. Equities have been weighting on the Read more »
Despite the solutions adopted during the Group of Twenty summit, it seems that the problems in the European Union are still far from being solved. Moreover, the fact is that the concerns related to Greece did not manage to fade away, but those related to Italy have managed to increase and have caused a new wave of risk aversion among traders. There are obvious concerns related to the fact that the debt crisis is becoming contagious in the Eurozone, spreading from one country to the other. Based on this fact, the risk aversion has increased, causing the Euro to fall against all its major counterparts and the US Dollar to rise as safe-havens are trader’s first option at the moment.
It is today that the Greek Prime Minister, George Papandreou, has agreed to resign and to allow the unity government which is formed out of both ruling party members and opposite party members, take the needed decisions Read more »
The effects of the economic problems around the world can be seen in the latest evolution of the Australian Dollar. The problems around the world have caused all economies to weaken due to the decrease in demand and to the concerns of investors. The Australian Dollar has ended a week of losses against most of its major counterparts, especially the US Dollar and the Euro. This is both due to the negative fundamentals Australia is faced with at the moment and to the decision taken by the Australian Central Bank of cutting the value of the interest rates.
It is important to know that the Australian Dollar is very much dependant on the way in which commodities perform due to the fact that Australia’s economy is based especially on exports. The fact is that commodities are under a lot of pressure at the moment due to numerous negative factors around the world. One of the main issues is Read more »
As traders become more and more anxious about the outcome of the Group of Twenty summit, the market continues to be dominated by risk aversion, which causes safe-haven currencies to grow against riskier assets. Based on this fact, the GBP/USD pair fell today. This decrease has not been caused only by the situation in Europe, but also by the poor state of the British economy. The European leaders have hold a summit in which they have discussed the European sovereign debt crisis and the measures that should be taken in order to prevent the situation in Greece from spreading towards other European countries. Although none of the results of this summit have been made public yet, there are rumors according to which a forced involvement in Greece and in other indebted European nations is not exactly out of the question. There are also rumors according to which politicians have different opinions about the measures that have to be Read more »