All Entries Tagged With: "usdollar"
Euro No Longer Hostage to Greece?
Yesterday, ratings agency Standard & Poor’s cut Greek debt to the lowest possible rating: “CCC”. That’s three steps lower than the country’s previous “B” rating. Surprisingly, the EURUSD strengthened following the announcement, leading one to wonder what might be happening. First of all, S&P is the last of the three major rating services to issue [...]
Euro Rises on Greek Deal, But Long-Term It’s China That Matters
The European Commission, the European Central Bank, the International Monetary Fund, and Greece have concluded a new agreement that will send more euros to the troubled country in exchange for an acceleration of Greek efforts to privatize about $72 billion of the country’s assets. The EC, the ECB, and the IMF – collectively called the [...]
Strong Euro, Weak Eurozone
Nobel laureate and New York Times columnist Paul Krugman wrote a recent blog post explaining why the euro continues to exhibit strength while the eurozone itself is in serious trouble. The short answer is, “It’s the interest rates, stupid.” Krugman puts it more elegantly, but that’s the nub of the answer. The strong countries at [...]
Forex Markets Wary of QE3
There’s not been an awful lot of good news lately about the US economy. Unemployment figures are weak, manufacturing orders are weak, consumer confidence is weak. At least some of that weakness is being attributed to the termination of the Federal Reserve Bank’s second round of quantitative easing, called QE2. Though QE2 was not universally [...]
Germany Will Back New Loans to Greece
The debate in Europe over how to deal with an increasingly shaky Greece might have been resolved. Again. Temporarily. Germany had been pushing for a restructuring, or as some called it, a re-profiling of Greek sovereign debt. The European Central Bank strongly opposed the idea, arguing instead for another bailout package. It now appears that [...]
China, Copper, and Foreign Exchange
Copper posted a 2011 low of around $3.83/pound in mid-May. Since then, the metal has come back to a recent intra-day high of slightly more than $4.19/pound, but that’s still nearly -13% below the 2011 high. Copper’s recovery is part of the reason that commodities in general have turned around. A fair portion of the [...]
China’s Banking Woes
Two recent articles published by Caixin Online point out different, but related problems facing Chinese banks. The first notes something that many have long suspected: China’s appreciating exchange rate has cost the country a lot of money – more than $2 trillion. The second article questions the value of assets held by China’s banks. The [...]
Dollar Stronger Due to Euro Debt Worries
Last week’s news that the euro core members were meeting to discuss Greece’s withdrawal from the single currency turned out to be false. That didn’t stop the euro’s slide, which dropped the EURUSD rate from 1.44 down to almost 1.40 in just a few days. Compared with the US dollar, the euro is now viewed [...]
UK Inflation to Remain Above Target Through 2012
The Bank of England has released its May Inflation Report and predicted that UK inflation is very likely to remain above the 2% target throughout 2012. Forex traders took that as a sign that the bank would have to tighten monetary policy by raising interest rates, and the British pound got a little bump from [...]
Euro Falls on Possibility Greece Will Flee
In the past week, the EURUSD has fallen below 1.43 on rumors that Greece would leave the European Monetary Union. This is not the first time the notion has been floated, and just like those other times Greek and EU officials strongly deny that such a move is being contemplated. But its not the worst [...]
