Contagion Throughout The Currency

(Reuters) - Asian shares eased on Thursday as markets were vulnerable to faltering factory orders in China and lack of concrete measures shown by European leaders to tackle the risk of Greece leaving the currency bloc. European Union leaders, at an informal meeting on Wednesday, said they wanted Greece to stay in the euro zone while respecting commitments it had made in return for its bailout, but have been advised by senior officials to prepare contingency plans in case Greece exits. The murky outlook for the euro zone and fears that the crisis could derail the global economy have prompted investors to park money in safe-haven assets such as U.S. and German government bonds, the U.S. dollar or cash. Implications of a retreat in China's HSBC Flash Purchasing Managers Index, the earliest ...

Highlights - An acceleration in deposit withdrawals, combined with the prospect of an anti-austerity party winning the next election, has brought to the fore concerns about a potential Greek exit from the euro zone. - Our base case assumption is that under the most likely scenario, the Greek election will lead to a government that sticks to an EU/IMF program, even if the terms are renegotiated. - However, we do believe that Greece needs a further restructuring of its debt and we do think the country will ultimately exit the euro - we're just not convinced that Europe is ready for this to happen at the moment. - If an accident does occur and Greece does leave the euro in the near term, it would have global financial ramifications that could range from severe to catastrophic. ...

Forex News and Events: It has taken two-and-a-half years, and nearly USD 300bn of IMF/EU funds for markets to finally weigh in a more probable than not exit of the debt-laden country. Greece’s EMU exit is imminent for the second time in the last six months. Surprisingly though, the trigger for the recent gloomy expectations for Greece was not exclusively of an economic nature but also politics. During May 6 elections, the Greeks expressed their unwillingness to abide by the agreed-upon austerity measures. It wouldn’t have been a very dangerous position had Greece been solvent, but regardless of EU officials’ reassurance of continued help for Greece throughout the process, the country would run out of funds for the next installments due end of June and early July. In addition to markets ...

Fundamental Analysis EUR "Spain, once again, is where the confidence game is played" - Sebastian Paris Horvitz, strategist at HSBC Private Bank Suisse Spain sold the maximum targeted amount of debt, 2.5 billion euros, during yesterday’s auction with spiking borrowing costs. The interest rate of three-year bonds rose to 4.373% from April’s figure of 2.89% while interest rate of five-year bonds surged to 5.106% from 3.374 in March. USD "What we’re seeing in foreign-exchange markets is strong demand for the U.S. dollar" - Steven Saywell, head of foreign-exchange strategy for Europe at BNP Paribas SA Latest US initial unemployment claim data was released yesterday – 370 000 Americans demanded their jobless benefits last week versus a 368 000 consensus forecast. The Labor Department revised ...

Dukascopy Fundamental Analysis EUR Mario Draghi, the ECB President, insisted on Greece to stay in the Euro bloc during his public speech on Wednesday regarding the possibility of Greece withdrawal from the Eurozone. Nevertheless, according to him, the ECB will stick to its anti-inflation mandate. The ECB President's comments came after Irish and Belgian central banks reported that Greek exit would not be disastrous for the Eurozone. USD Jobless claims in the U.S. didn't live up to the expectations that it will decrease by 5K and remained unchanged, at 370K level, in the week from 6th to 12th of May. Amount of people on rolling unemployment claims increased by around 18K while the number of people on prolonged payments decreased by around 45K. 31 out of 52 states or territory's reported ...

The Week Ahead ■The Bank of England's next move ■Is this the beginning of the end for the Eurozone? ■Fed officials reluctant to signal more easing ■Broader risk environment outweighs Japanese rhetoric The Bank of England's next move The BOE kept rates on hold when it concluded its May meeting last week; it also allowed the asset purchase program to come to an end. Since the UK slipped back into recession in Q1 2012 and the growth figures at the start of the second quarter have continued to look weak, the decision to hold interest rates was mostly down to the sticky outlook for inflation. The attention now turns to Wednesday's Inflation Report. The focus will be on the Bank's growth and inflation forecasts. The growth forecasts are likely to be revised lower. Even ...

The euro (EUR) weakened to 1.3176 retreating from a two-week high at 1.3227 against the US dollar at the start of the new week following the French first round of presidential vote showing Socialist candidate Francois Hollande ahead of President Nicolas Sarkozy. Investors are concerned that a Sarkozy defeat may weaken the France-Germany cooperation in tackling the eurozone debt crisis. The International Monetary Fund increased its firewall to 430 billion dollar to deal with a potential eurozone debt contagion but this provided little boost to the single currency. The euro may become under pressure as investors are worried about debt auctions in Italy. The US dollar (USD) strengthened against a basket of currencies today as heightened risk aversion in the market spurred a higher demand for ...

(Reuters) - The euro fell against the dollar on Wednesday after French President Nicolas Sarkozy said a strong euro hurt exporters, and it looked set to stay pressured with investors still wary of Spain's fiscal problems and wider euro zone debt contagion. Traders cited selling by Swiss investors after Sarkozy said the euro's exchange rate should be up for discussion with the European Central Bank. The euro edged lower throughout the European session to hit a session low of $1.3076. The move erased modest gains made the previous day on upbeat earnings from U.S. companies, decent demand at a Spanish bill auction and a better-than-expected German ZEW sentiment survey. Market players said the euro could post further losses ahead of a Spanish bond auction on Thursday, and poor demand and ...

So far throughout the US session, the 17-nation common currency remains on being solid after kissing a two-month high against the dollar and the yen after the European Central Bank President Mario Draghi proclaimed publicly that Greek party leaders had reached an agreement on austerity measures needed to obtain a bailout. According to an emailed statement by the Greek Premier's office, an accord was met between Greek government and the troika this morning, after Greek Finance Minister Evangelos Venizelos arrived in Brussles for an emergency meeting with his eura-area counterparts today to dicuss terms of the resuce package. On March 20, Greece faces a 14.5 billion-euro bond payment, where the debt-chocked nation struggled to obtain an international aid package to avert an economic doom ...