Posts tagged ‘finance ministers’

February 20, 2012

Wells Fargo:Commodity and emerging currencies on the rise

Improved risk sentiment is spreading across the FX market, first after China’s PBoC decision of cutting the banks’ reserve requirement ratio by 50bp (from 21% to 20.5%), and secondly as the Eurozone debt crisis seems to be closing a chapter, with hopes of a second bailout decision by the end of the day.

“Essentially, we would expect Europe’s finance ministers to agree to further Greek financing today and leave only relatively minor technical detail to be resolved”, writes Nick Bennenbroek, head of currency strategy at Wells Fargo Bank. “That could see further gains in the commodity and emerging currencies this week, while it might also mean a neutral to slightly stronger bias for the major European currencies as well.

February 20, 2012

Time For AUD/USD Longs in Risk-On Trade Mode?

Risky assets are higher today, because of cut in China’s reserve-ratio requirement over the weekend by 50BPS to 20.5%, effective from February 24th.

That means that banks are now allowed to lend more money, which of course is good for economy. That’s why we saw a gap higher on commodities, stocks and lower on USD dollar; against the majors, as usually in Risk-on situation.

Finance ministers from the Eurozone are expected to approve a rescue package for Greece today, which is also supportive for the risk trade.

In this week we still favor more strength on FX-majors against the USD since market reversed last Thursday; Euro from 1.2970, Cable from 1.5640, Swiss franc from 0.9300,…

February 6, 2012

Euro Lower , Focus Turned to Greece

Euro is mildly lower as the week starts as focus turned from economic data back to the situation in Greece. A pressing concern is the agreement on Troika’s term for austerity. Greek coalition leaders failed to agree on the details of the terms demanded by international creditors after a five hour meeting with Prime Minister Papademos on Sunday. It’s reported that while the principles to cut spending in 2012 by 1.5% of GDP, or EUR 3.3b, was agreed, the three party leaders’ view on details differed. And there are two big issues left, labour and banks. Papademos then met with troika later on Sunday together with Finance Minister Venizelos and Labor Minister Koutroumanis. Now, the situation is, the three party leaders are required to give their first response to proposed measures by noon today so that it be taken into Euro working group in brussels. On Saturday, Eurozone finance ministers told Greece that it could not go ahead with the PSI debt swap deal unit the reforms are guaranteed.