Dow Jones Forex Focus
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24/01/2012
Don't Take Euro Strength For Granted. By Nicholas HastingsThe euro is still waiting for a firewall around Greece.Without it, the risk of contagion remains and the single currency's current level looks unsustainable.For a moment, it looked like the firewall was finally being built.A front page report in the Financial Times should have set the pulses of euro bulls racing. German Chancellor Angela Merkel was said to be going along with plans for the European Financial Stability Facility and the European Stability Mechanism to run in tandem.
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23/01/2012
So, what is the euro now? By David Cottle.Risk asset, carry trade funding currency or just a good old fashioned turkey?
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20/01/2012
Eastern Promises For Sterling. By Nicholas Hastings.The U.K.'s long flirtation with the East is about to pay off once again. Ever since Margaret Thatcher opened the economy to foreign investment back in the 1980's, Japanese and even Chinese money has periodically poured in. Banking, electronics and auto manufacturing have all benefited at one time or another since then. Now it looks as if another wave of eastern money could be on its way as both China and Japan look for safe places to put their funds abroad.
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19/01/2012
A Bump In The Road For The Aussie. By David CottleLike one of those fleet-footed little mammals that usurped the dinosaurs, the Australian dollar seems bred for success in a changed world.Its home was shielded from the worst of the banking and sovereign debt blasts that have shaken Europe and the U.S. and replete with raw materials that China couldn't ship in fast enough. Australia's debt is triple-A rated, too, of course, and likely to stay that way.
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18/01/2012
Real Yields Will Lift Sterling Back Up Again. By Nicholas HastingsSterling bears really shouldn't get too excited. Talk of more quantitative easing from the Bank of England may be undermining the pound a little at the moment. This has been enough to push the sterling trade-weighted index down to 80.6 now from a high of 81.70 as 2011 turned into 2012.
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17/01/2012
Better Chinese Support For The Euro. By Nicholas Hastings.China may yet rescue the euro. Not with bail-out funds but with something much more important--growth. One of the key problems the euro zone had faced as politicians struggle to stop the euro from falling apart has been the prospect of a sharp slowdown in global growth. How can struggling euro zone countries meet their growing debt repayments at a time when their economies are shrinking? These prospects had gone from bad to worse at the end of last year as the Chinese economy, the second largest in the world, appeared to be sputtering.
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16/01/2012
Impact Of S&P's Downgrade Spreads Far And Wide. By Nicholas HastingsThe impact of Standard & Poor's decision to downgrade France and eight other euro-zone members is stretching far, both within and without the euro zone itself. Germany may have preserved its triple-A credit rating, but the decision to cut France's to double-A plus and put the country on negative outlook will more than likely mean that Berlin has to pay more. The key problem for Germany is the so-called European Financial Stability Facility, which was created to fund the bailout of peripheral debtors such as Greece.
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16/01/2012
Greece Will Wipe Away The Draghi Magic. By Nicholas HastingsMario Draghi probably surprised himself.
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13/01/2012
Greece Will Wipe Away The Draghi Magic. By Nicholas HastingsMario Draghi probably surprised himself.Only his third outing as president of the European Central Bank and he had the euro eating out of his hand.He lowered speculation over further monetary easing. He waxed lyrical about the success of the bank's long-term refinancing operation in averting a credit crunch. And, with Italy's bond yields finally falling back under the key 7% level that is seen as unsustainable, his optimism over improvements in the financial system was nearly infectious.The euro reflected this, bounding nearly 1% higher as he spoke.
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12/01/2012
Sterling losing Race Against Dollar, Not Euro. By Nicholas HastingsIf this was a race, sterling would have just been overtaken by the dollar as well as by the euro. But, the pound shouldn't stay in third place for long. Chances are it should soon stage a recovery against the single currency, even if overtaking the dollar again will prove a lot more difficult. The shift in sterling's fortunes has come for two reasons: increased speculation that the Bank of England will have to introduce more quantitative easing and increased buying interest in the dollar as the U.S. economy continues to recover.
