Posts Tagged: safe-haven

As the situation in the European Union continues to be tensed, the trading market has a powerful reaction as the risk aversion has triggered a new wave of changes on the market. The safe-havens seem to be favored and the currencies around the world gain based on different speculations related to the evolution of the sovereign debt crisis.

The Euro has managed to regain a little of yesterday’s losses today on the speculation that the policy makers are to increase the rescue fund. The Guardian announced that Germany and France agreed to increase the European Financial Stability Facility from the level of €440 billion ($607 billion) to the one €2 trillion. This change is supposed to take place before the G-20 summit which is to take place this weekend. The Stoxx Europe 600 Index grew by 0.8 percent.

Moody’s has announced the downgrade of another credit rating, that of Spain. This has generated a wave of Read more »

As it could have been expected, the growth of the risk aversion has caused numerous changes on the trading market as it has caused the fall of higher yielding assets and the growth of safe-havens. The main reason for this new wave of risk aversion is the sovereign debt crisis in Europe and the decrease of the trader’s confidence in the results of the Group of Twenty summit based on the previous results of the discussions held by the same European officials, which have been inconsistent.

This has caused the Euro to continue its yesterday’s fall against most of its major counterparts. This is also related to the fact that Moody’s Investor Service has announced yesterday that the credit rating of France is in danger and that the economic sentiment in Germany has deteriorated. By now, Moody’s has explained that the sovereign debt crisis in Europe has had a negative influence upon all the countries in the Eurozone, Read more »

Despite the fact that the European debt crisis seems to get worse than usual, the European currency managed to grow a little based on the assumption that the sovereign debt crisis is to be contained. This is the reaction of the forex traders to the discussions had by the European leaders. There are numerous traders who have confidence in the European leaders and who think that all these problems are going to be solved.

At the moment, it does not seem to be any plans as to expand the EFSF, but the participants to the trading market are considering that the European leaders are to find a solution to the sovereign debt crisis and that this solution is to be found before the crisis brings down Italy, Spain and possibly France as well. It seems that, at this moment, there are numerous efforts made in order to require recapitalization for banks. There is also a great focus Read more »

The European zone is confronted with more and more bad news each day. Some of the problems associated with the making progress of the sovereign debt crisis and the bailouts of countries such as Greece are related to Angela Merkel, the German Chancellor, who has seen divisions over the problem of the bailouts in the Eurozone in the coalition government. There are some German politicians who are disgusted at the thought of sustaining other European countries in their debt crisis. This comes as a consequence of the fact that Germany already provides huge quantities of money for the indebted nations and in order to sustain the Euro on the trading market. This is rather normal as the German economy is the most powerful and the most solvent one in the Eurozone. As a matter of fact, at the moment, Angela Merkel is faced with interior problems as there are parties which sustain the Euro and others which are Read more »

This has been quite an interesting trading week as there have been lots of changes on the market. Not only that the macroeconomic reports have shown weak data about almost all the countries, fact which has made currencies lose value, but also the Swiss National Bank announced the fact that it has taken the decision of imposing a fix trading rate for the EUR/CHF pair, that of 1.20 in order to stop the overvaluation of the nation’s currency. Despite this additional measure, the Swiss Franc continued to grow against its major counterparts.

The previous week has been quite bad for the Great Britain Pound which has registered the greatest weekly fall against the US Dollar in nine months. This has been possible based on speculation that the weak UK economy is to force the central bank to maintain the interest rates at the record low level. From a virtual point of view, all the fundamental data concerning the Read more »