The drama surrounding the Murdoch’s and the News International hacking scandal will once again steal the headlines this morning, but don’t let this distract you too much from the intensifying Euro debt crisis.
Senior market analysts are clamouring to point out that politicians dragging their heels are threatening to make this European debt crisis into a new financial meltdown. “European politicians don’t or don’t want understand that Europe is on the precipice” remarked Suki Mann of Societe Generale. RBS reiterated these fears stating “there is a growing risk of a large systemic risk event in the near term and if not in a matter of weeks”.
These fears however have done little to convince European politicians to deliver concrete solutions. German Chancellor Angela Merkel seemed in little hurry yesterday when she told reporters there would be no “spectacular step” at the meeting in Brussels on Thursday to discuss a new Greek bailout.
Why does Germany not seem to be in any rush? Well, many of the options that may help resolve the crisis will cost Germany in the form of more bailout funds and/or providing financial guarantees. This does not go down well with a German public furious at bailing out what they see as other euro countries irresponsibility and reiterates how difficult achieving a resolution to this crisis will be.
On a more positive note, hopes of a deal in the US to raise their debt ceiling were improved yesterday after the so called “Gang of Six” - made up of three Republican and three Democrat senators - proposals appeared to gain traction. With the August 2nd deadline fast approaching, a deal needs to be struck by the start of next week as it takes a week to write the legislation and get the vote passed in Congress.
In morning trading, Sterling received a boost from the Bank of England minutes released at 9.30, despite the vote remaining at 7 – 2 in favour of keeping rates on hold. Spencer Dale and Martin Weale, who voted for rates to rise by 25 basis points stated the case for a rate rise “remains strong” despite weak economic data. After the release, the pound traded at 1.6116 against the dollar and 1.1364 against the euro.
What does this all mean for me? Well buying your EUR, USD, AUD or any other currency at the wrong time could cost you a fortune. There is no crystal ball but Currency UK can give you the information you need to make an informed decision.
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Posted in Daily Market News on May 30 2014
European bank stress tests were widely criticised on Friday, with one analyst declaring it as bad as the 1979 Irish driving test. In 1979, in an effort to win votes the Irish government declared anyone who had taken their test twice and failed would automatically qualify for a licence –...VIEW FULL ARTICLE
Posted in Daily Market News on Jul 18 2011 by alex