Post Tagged with: "Grexit"

Dollar volatility rises

Dollar bulls were squeezed last night as we saw some dramatic moves in FX markets with the dollar plunging after the Fed lowered its inflation and growth forecasts last night. There was every likelihood of there being a spike in volatility during and after the FOMC decision which we warned about yesterday, as well as being consistent in saying any rate hike is likely to come later than many were anticipating. As expected the word “patience” was removed and traders were caught off guard as the dollar headed lower rather than higher as Yellen clarified this did not mean inflation normalising anytime soon. The move was significant across all the majors with GBPUSD getting back above 1.5000, EURUSD exceeding 1.1000 and USDJPY touching 119.30 at its lowest, which would have triggered many stops and therefore exacerbating the moves. The initial reaction has been largely reversed overnight, although the plunge in US Treasury yields has barely see any recuperation of their losses, so doubtless to say the Fed continues to play a waiting game. They want to see a more sustainable improvement in the labour market, in particular on the wage growth front and signs that disinflation pressures are subsiding.

Now the Fed meeting is out of the way and we know the first rate hike will come later in the year, focus will revert back on the single currency as negotiations continue between Greece and its creditors in its quest to secure more funding and avert a Grexit.

Read the rest of the article Dollar volatility rises
Grexit risks rise

Grexit risks rise

Currency markets have been placid so far this week, in particular the euro which has been taking the negotiations between Greece and Germany in its stride. It’s been a far cry from a couple of years ago when volatility was much higher during the debt right down agreements, but the risks remain the same of [&hellip

3 things that did NOT happen in 2012

3 things that did NOT happen in 2012

2013 already began with a storm, but let’s see what did not happen in 2012, a year that saw big events, but also the lack of them – a lack of major disasters that resulted in a lack of volatility. Will they happen in 2012? Or will growth replace crises and create volatility driven by positive [&hellip

5 Reasons Why Greece Could Leave the Euro-Zone After the US Elections

5 Reasons Why Greece Could Leave the Euro-Zone After the US Elections

Greece could leave the euro-zone after the US elections. This speculation isn’t necessarily related to the report that Europe wants to help Obama get re-elected. There are quite a few other reasons that support a Grexit in upcoming weeks – some are directly related to the elections, and other are just related to the timing. [&hellip

When currency devaluation goes too far

When currency devaluation goes too far

Brazil’s finance minister Guido Mantega coined the term “currency wars”, referring to the situation where various countries make efforts to weaken their currency, thus supporting local exports but also shifting the pain to others, a “beggar thy neighbor” policy. When currency devaluation goes too far, it can have a negative impact on the other side of [&hellip

Europe Is Not Ready for a Grexit

Europe Is Not Ready for a Grexit

Despite the statements of a “manageable” Grexit, Europe is not really ready for such a move and this could be painful for the euro, before and after the move, says John Kicklighter of DailyFX. In the interview below, Kicklighter discusses the situation in Europe, the potential disappointment regarding more stimulus from the Fed, the relative [&hellip

Without an immediate Recession Threat, QE3 Hints are Unlikely

Without an immediate Recession Threat, QE3 Hints are Unlikely

The recent evidence from the Beige Book shows that economic activity is gradually picking up. This lowers the chances for any hints about QE3 from Bernanke, says David Song of DailyFX. In the interview below, Song discusses the situation in the US, the chances for a disappointment from the ECB, a potential Grexit and more [&hellip

3 Reasons to be Optimistic About Europe

3 Reasons to be Optimistic About Europe

The European debt crisis weighed heavily on the economies, stock markets and the value of the euro in the past few years and there was a sense that solutions were unsatisfactory to say the least. There is a general notion of “kicking the can down the road” while the situation continued deteriorating. However, there are [&hellip

EUR/USD June 11 – Euphoric Jump on Spanish Bailout Losing Charm

EUR/USD June 11 – Euphoric Jump on Spanish Bailout Losing Charm

EUR/USD opened the week with an impressive weekend gap, after the announcement of a bank bailout for Spain worth 100 billion euros. This declaration lacks details and the timing shows that it is a move intended to contain the fallout from the Greek elections. Italian issues are still on the agenda. After the initial jump, the [&hellip

8 Holes in the Spanish Bailout

8 Holes in the Spanish Bailout

In an emergency conference during the weekend, the EU decided on granting Spain up to 100 billion euros for its banks.  After long weeks of uncertainty, this move will definitely cheer up markets. However, looking at the details or the lack of them, shows that the gloom could return within days. Here are 8 holes [&hellip