Foreign Exchange - UK Weekly Update - Written by rick on Tuesday, October 21, 2008 10:36 - 0 Comments
Euro Battles on as France act on Banking System - World First’s Euro Update - 21st October 2008
Euro Battles on as France act on Banking System
Euro has been struggling in most of its major crosses recently as the business confidence in the region continues to weaken. German ZEW index fell to -0.63 last week, a good indication of the lack of confidence throughout and reinforcing expectations of further deteriorations in conditions from the Euro Zone
Trichet commented negatively on the state of affairs late on Sunday, saying that the economy was in for a “strong slowdown”. Compounding this was a report by the IMF predicted growth in 2009 of just 0.2%
Fragmented policy responses to the crisis continue to hamper a complete turnaround in Euros fortunes. The latest action has been with France, which recently injected over €10bn into their six largest banks in order to strengthen their balance sheets. As expected this has sent French and European equities on another bull run following a rather volatile last week.
Euro has fallen to mid 1.32 levels against dollar, where it is finally finding some resistance. Sterling made some headway last week, having a couple of attempts at the 1.30 level. It is largely range trading in the mid-high 1.20’s currently.
Tier 1 data for the rest of this week is extremely light; we look for further weak figures on Thursdays Flash PMI figures from Germany as the only major release. Once again it will be a week dominated by Governments, equity and commodity movements
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