As the Greek election looms this weekend, policy makers from around the world intensified warnings that the Eurozone’s failure to sort out the debt crisis threatens to derail the global economy. Monetary policy makers spoke as the G20 leaders prepare to meet in Mexico next week giving investors more hope of some major form of coordinated action. This has helped to support risk appetite broadly although yields on Spanish 10-year bonds broke through the 7% level yesterday.
Sir Mervyn King announced yesterday two new stimulus packages to help boost liquidity and lending to help deal with “exceptional market stresses.” The schemes will involve the Bank of England providing billions of pounds of cheap credit to the UK banking sector and further details are expected in the coming days.
Inflation is starting to lose its grip on developed economies as the cost of living in the US fell in May by the most in more than three years as fuel prices retreated. The consumer price index declined by 0.3% to 1.7% year-on-year. Similarly, Eurozone inflation hit a 15-month low in May of 2.4% from 2.6% in April giving the ECB leeway to cut interest rates.
On the FX markets, the euro traded steadily with EUR/USD above $1.26 as markets await the outcome of the Greek election on Sunday. It is worth noting that the exit polls are scheduled for Sunday evening which could prompt major moves in the currency markets before London trading begins on Monday morning.
Currency UK will offer you the best exchange rates available and ensure that you subsequent international transfers are handled as quickly and as efficiently as possible.
Do you want to earn some extra money? Then you can profit from our affiliate program by referring a company or friend that may benefit from our services and earn a commission in return. Contact us now on +44 (0)20 7738 0777 or click here.