Portugal now needs funding
Portugal’s three main parties are still trying to work out how to end the political crisis that broke down and left the country’s bailout plan a total mess. Portugal’s ruling Social Democrat Party said the coalition government would still press forward even after general talks collapsed. The political turmoil has forced creditors to review the bailout until early September. Expect this story to weigh heavily on the Euro this week as the saga grows and other country’s come under the spot light.
The G20 nations pledged at their meeting over the weekend to put growth before austerity. They stated they will focus on reviving the global economy and have pledged to adjust stimulus policies carefully so that any recovery is not derailed by market volatility. Expectations that the US Federal Reserve were likely to scale back monetary stimulus dominated the talks in Moscow. GBP/USD meanwhile has improved to monthly highs as the market allows the USD to depreciate a fraction whilst it awaits more details of when the US will start to reduce stimulus.