EU Summit Eagerly Anticipated

Currencies Direct October 18th 2012 - < 1 minute read

As the EU summit gets under way all
eyes will be on how European leaders respond to the challenges
facing Europe. The aim of the summit will be to focus a drive
for a more unified political and economic block as opposed to
fire-fighting from one crisis to the next. As we stand the market
is awaiting news on a sovereign bailout request from Spain or at
least a credit line to be put in place to ease on-going credit
concerns. With this expectation and positive talk from EU
politicians ahead of the EU summit the Euro is gaining. 
EUR/USD has once again pushed back over 1.30 and is trading at the
moment at 1.3125. As we stand Spain is still reluctant to
request a bailout and the decision rests with them, it is a catch
22 as the recent fall in Spain’s cost of borrowing actually eases
the pressure for a formal request.

With hope on positive news to come
from the EU summit and better economic indicators from China the
markets are experiencing a move back into risk. Asian equities are
higher after Chinese GDP increased in Q3 and we also saw good
economic activity indicators. In addition to support the move
into risk we had upbeat US housing data and confirmation the
Moody’s the credit ratings agency decision to maintain Spain’s
sovereign investment credit rating. The USD and the JPY the
traditional safe haven currencies are selling off in line with the
risk on momentum.

From the UK we have also had
September Retail Sales which came in better than expected. So
the mood is upbeat so far today as we wait to see if Europe can
follow through with the good momentum.

Written by
Currencies Direct

Select a topic: