Euro Troubles Constantinou

Currencies Direct April 26th 2010 - < 1 minute read

After stabilising on Friday, the Euro took another pounding on Monday morning as details begin to emerge about the proposed EUR45 billion rescue package. Greece’s request for emergency aid looked to stem the flow of selling as Finance minister Papaconstantinou warned investors they will “lose their shirts” if they bet the cash strapped nation will default. The debt-saddled country has announced billions of euros in austerity measures, including tax hikes and public sector wage cuts. The Euro has been trading back above 1.16 against Sterling while Euro/dollar has fallen below 1.33.

Fridays UK data proved negative for the pound as we discovered the economy grew at half the pace economists predicted in the first three months of the year. The office for National Statistics reported that GDP grew by 0.2% in Q1 2010 against the 0.4% analysts had expected. The focus in the UK will be on the final weeks of the election campaign and the possible outcomes that may emerge as polling day draws closer. Leader of the Lib Dems, Nick Clegg, has warned current PM Gordon Brown not to expect a coalition with his party, though a tie up with the Conservatives also looks unlikely.

The Dollar advanced to a two week high against the Yen as government reports showed US new home sales rose in March by the most in almost five decades and orders for durable goods surged. Bookings for US durable goods excluding transportation items advanced 2.8 percent last month after a 1.7 percent gain in February.

Attention this week will likely remain on Greece, but the market will also be watching the latest US FOMC rate announcement on Wednesday. No change in official rates is expected but the tone of the FOMC statement will be watched closely.

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