The euro continued to make significant gains against the US dollar today. Further rumours about Middle East and Russian buyers of European debt helped send the single currency higher, while weak housing data from the states dragged the greenback lower.
EUR/USD briefly went above $1.35 to hit an eight week high of $1.3537. A report in a German newspaper outlined a prospective new restructuring plan for Greece. The report said that the German government was drawing up a plan to allow the Greeks to buy back their own debt using a eurozone bailout fund. The report has been denied by the German parliament.
The seventeen-nation currency has had a few positive blips recently, through the ZEW figures yesterday, speculation of sovereign wealth funds purchasing EU debt and JC Trichet alluding to an increase in the EU’s interest rate. However, the macro issues affecting the region are still prevalent and should set the overall tone for the year. Any boost the euro has received since the start of the year is surely just band-aids re-attaching a dismembered limb.
Is everything going to be okay in Europe or is this simply another calm before another storm? Please add any thoughts and comments below.
Tom Hampton
Analyst – Caxton FX
For the latest forex news and views, follow us on twitter @caxtonfx and sign up to our daily report.
Wednesday, 19 January 2011
Tuesday, 18 January 2011
UK inflation figures send sterling higher
Sterling extended its gains against the dollar after a much higher than expected inflation reading fuelled expectations of an interest rate hike from the Bank of England.
The December Inflation Report came in at 3.7%, far higher than the expected 3.4%. Rising commodity (specifically food and fuel) prices are thought to be the main drivers behind the surge. These results show the largest rise between November and December in history. Further upward pressure is expected next month as the January figure will show the preliminary effects of the 2.5% rise in VAT. If the Core Price Index (CPI) continues to rise at a similar rate, the BoE will be forced to raise interest rates, perhaps as early as May.
Focus will now shift to next week’s BoE Monetary Policy Committee meeting minutes to see if other policy members have joined the hawkish sentiments of Andrew Sentence in calling for a rate rise.
The euro has also pushed over 1% higher against the greenback after economic confidence figures came in considerably higher than expected. Also, reports of investors from the Middle East and Russia buying eurozone debt have helped to send the single currency higher. However, speculation that the EU’s policy makers plans to stop the crisis from deepening are working are premature, if not pre-glint-in-the-milkman’s-eye. The true depths of the debt crisis have not been realised and national plans to cut deficits are lightweight at best. There could still be a long way to go in this saga. Don’t forget that it was not until May 2010 that the Greek tragedy unfolded. Expect to see a couple of unanticipated events this year.
When should Merv and the boys increase interest rates and by how much? Any thoughts or questions, please feel free to post below.
Tom Hampton
Analyst – Caxton FX
For the latest forex news and views, follow us on twitter @caxtonfx and sign up to our daily report.
The December Inflation Report came in at 3.7%, far higher than the expected 3.4%. Rising commodity (specifically food and fuel) prices are thought to be the main drivers behind the surge. These results show the largest rise between November and December in history. Further upward pressure is expected next month as the January figure will show the preliminary effects of the 2.5% rise in VAT. If the Core Price Index (CPI) continues to rise at a similar rate, the BoE will be forced to raise interest rates, perhaps as early as May.
Focus will now shift to next week’s BoE Monetary Policy Committee meeting minutes to see if other policy members have joined the hawkish sentiments of Andrew Sentence in calling for a rate rise.
The euro has also pushed over 1% higher against the greenback after economic confidence figures came in considerably higher than expected. Also, reports of investors from the Middle East and Russia buying eurozone debt have helped to send the single currency higher. However, speculation that the EU’s policy makers plans to stop the crisis from deepening are working are premature, if not pre-glint-in-the-milkman’s-eye. The true depths of the debt crisis have not been realised and national plans to cut deficits are lightweight at best. There could still be a long way to go in this saga. Don’t forget that it was not until May 2010 that the Greek tragedy unfolded. Expect to see a couple of unanticipated events this year.
When should Merv and the boys increase interest rates and by how much? Any thoughts or questions, please feel free to post below.
Tom Hampton
Analyst – Caxton FX
For the latest forex news and views, follow us on twitter @caxtonfx and sign up to our daily report.
Monday, 17 January 2011
Sterling bolstered by speculation about tomorrow mornings inflation report
Sterling rallied to a two month high against the dollar on Monday, fuelled by increased speculation over tomorrow’s UK inflation report and the timing of the next rate rise from the Bank of England. If the figures come in at the expected 3.3% or higher, the rally may well extend beyond €1.20 and $1.60.
In a break from the normal trend, which usually tracks euro/dollar, the pound is actually making its own route higher today. A bank holiday in the States combined with investors looking for greater reassurance over the extension of the European Financial Stability Facility (EFSF) helped GBP move higher. It rose as high as $1.5954 and €1.1975 against the dollar and seventeen-nation currency respectively.
Last week’s strong Iberian bond sales were backed by the ECB’s sovereign debt buying scheme which rose to €2.313bn for the week. The implication of this figure is that the unexpected euro strength last week was unfounded and we expect to see the single currency fall this week with sub $1.30 increasingly possible.
When will the euro bottom out? If you have any questions, please feel free to comment below.
Tom Hampton
Analyst – Caxton FX
For the latest forex news and views, follow us on twitter @caxtonfx and sign up to our daily report.
In a break from the normal trend, which usually tracks euro/dollar, the pound is actually making its own route higher today. A bank holiday in the States combined with investors looking for greater reassurance over the extension of the European Financial Stability Facility (EFSF) helped GBP move higher. It rose as high as $1.5954 and €1.1975 against the dollar and seventeen-nation currency respectively.
Last week’s strong Iberian bond sales were backed by the ECB’s sovereign debt buying scheme which rose to €2.313bn for the week. The implication of this figure is that the unexpected euro strength last week was unfounded and we expect to see the single currency fall this week with sub $1.30 increasingly possible.
When will the euro bottom out? If you have any questions, please feel free to comment below.
Tom Hampton
Analyst – Caxton FX
For the latest forex news and views, follow us on twitter @caxtonfx and sign up to our daily report.
Thursday, 13 January 2011
An unexpected bounce in the euro’s step
A successful Spanish bond auction helped ease some concerns about the debt crisis plaguing the eurozone’s most indebted nations and finally gave the market some interest and direction.
The euro hit a one month high against the Swiss franc and regained some ground against most of its counterparts following the news. News last night that Germany’s principal, Angela Merkel, may be willing to extend the EU’s relief fund helped to put investors mind at ease and the bond auction went through without a problem. Both the Portuguese and Spanish auctions were concerns at the start of the week, helping to suppress the single currency. However, with the US dollar’s weakness late in the session yesterday and the news of the Iberian sales going well, the 17 nation currency has appreciated to €1.19 and €1.33 against the pound and greenback respectively.
The outlook for EUR remains to the downside in the medium term however. With no plan set in stone and Southern Europe’s debt snowballing, one set of bullish data from the US could turn everything back on it head.
In other news, Timothy Geithner once again called for the People’s Bank of China to allow the yuan to appreciate. Its artificially low value gives China an advantage over the rest of the export market and makes American goods less competitive. However, it seems highly unlikely that the world’s second largest economy would give up such a strong opportunity to hunt down the ailing world ‘no 1.’
Should China do what is best for them or the world economy? To comment on this or any part of the blog please write a comment below.
Tom Hampton
Analyst – Caxton FX
For the latest forex news and views, follow us on twitter @caxtonfx and sign up to our daily report.
The euro hit a one month high against the Swiss franc and regained some ground against most of its counterparts following the news. News last night that Germany’s principal, Angela Merkel, may be willing to extend the EU’s relief fund helped to put investors mind at ease and the bond auction went through without a problem. Both the Portuguese and Spanish auctions were concerns at the start of the week, helping to suppress the single currency. However, with the US dollar’s weakness late in the session yesterday and the news of the Iberian sales going well, the 17 nation currency has appreciated to €1.19 and €1.33 against the pound and greenback respectively.
The outlook for EUR remains to the downside in the medium term however. With no plan set in stone and Southern Europe’s debt snowballing, one set of bullish data from the US could turn everything back on it head.
In other news, Timothy Geithner once again called for the People’s Bank of China to allow the yuan to appreciate. Its artificially low value gives China an advantage over the rest of the export market and makes American goods less competitive. However, it seems highly unlikely that the world’s second largest economy would give up such a strong opportunity to hunt down the ailing world ‘no 1.’
Should China do what is best for them or the world economy? To comment on this or any part of the blog please write a comment below.
Tom Hampton
Analyst – Caxton FX
For the latest forex news and views, follow us on twitter @caxtonfx and sign up to our daily report.
Wednesday, 12 January 2011
The end is nigh for two of the most boring sessions in history for sterling/euro
Having waited with bated breath for a tragic Portuguese bond auction and the next jolt in the euro’s demise, the market was bitterly disappointed.
Having stayed within a sixty pip range yesterday, the possibility of the single currency freefalling was all but snubbed out. A strong auction for Portuguese bonds quelled immediate concerns about the country’s debt problems and forced GBP/EUR to trade within an even smaller range this morning. The 17-nation currency barely moved after Lisbon sold €1.29billion in debt, including ten year bonds which were sold at a lower average cost than the previous sale.
Although the euro may have survived this round, it will remain under heavy selling pressure and remain near its four month low against the pound. Bond auctions from both Spain and Italy tomorrow will be heavily scrutinised, while Portugal is still expected to seek a bailout for its mounting debt.
Positive speculation (that interest rates will rise sooner than thought to fight inflation) ahead of tomorrow’s interest rate decision from the BoE has sent the US dollar temporarily downwards against GBP. Also, a lack of any news out of the US has not helped with the greenbacks lack of support this week. However, with trade balance and PPI data out tomorrow, we could see a resurgence, especially against the euro.
If you do have any currency related questions, or an opinion on the next interest rate decision, please feel free to comment below.
Tom Hampton
Analyst – Caxton FX
For the latest forex news and views, follow us on twitter @caxtonfx and sign up to our daily report.
Having stayed within a sixty pip range yesterday, the possibility of the single currency freefalling was all but snubbed out. A strong auction for Portuguese bonds quelled immediate concerns about the country’s debt problems and forced GBP/EUR to trade within an even smaller range this morning. The 17-nation currency barely moved after Lisbon sold €1.29billion in debt, including ten year bonds which were sold at a lower average cost than the previous sale.
Although the euro may have survived this round, it will remain under heavy selling pressure and remain near its four month low against the pound. Bond auctions from both Spain and Italy tomorrow will be heavily scrutinised, while Portugal is still expected to seek a bailout for its mounting debt.
Positive speculation (that interest rates will rise sooner than thought to fight inflation) ahead of tomorrow’s interest rate decision from the BoE has sent the US dollar temporarily downwards against GBP. Also, a lack of any news out of the US has not helped with the greenbacks lack of support this week. However, with trade balance and PPI data out tomorrow, we could see a resurgence, especially against the euro.
If you do have any currency related questions, or an opinion on the next interest rate decision, please feel free to comment below.
Tom Hampton
Analyst – Caxton FX
For the latest forex news and views, follow us on twitter @caxtonfx and sign up to our daily report.
Tuesday, 11 January 2011
The euro hovers before Portugal’s bond auction tomorrow
Sterling remains near its four month high against the floundering euro as the debt crisis continues to undermine the single currency.
The euro has managed to claw back a few points against the pound; however the pair have remained within a fifty pip range and near the four month high. The general opinion within the market seems to be for GBP to make further gains against the seventeen nation currency. Focus is fixed firmly on Portugal’s bond auction tomorrow. The question as to whether the more indebted nations within the EU can raise money is keeping EUR very much on the back foot. If the Portuguese do not manage to raise the necessary funds from the debt market, they will be forced to turn to the EU and IMF for financial aid.
Further bond auctions on Thursday for Spain and Italy could set the tone for the next few months, despite China and Japan’s rescue efforts.
In other news, it is bonus season for many city institutions and rumours are rife. JP Morgan are reported to be sharing £4.2billion between their 11,000 staff in London, the question of how big the bonus pool is at RBS is making politician’s blood boil and now Barclay’s is finding its name in the tabloids crosshair. Why? Well, the points outlined are based around the use of Cayman Island bank accounts to minimise the amount of tax paid in the UK and US. Which financial institution doesn’t? Surely we should revere a bank that made it through the financial crisis without needing to be bailed out? Surely we should take notes on the fact they came through the bad times having picked up some of the best bits of some failing companies? And, surely Bob Diamond deserves his £8million far more than Stephen Hester deserves his £2.5million?
If you have any strong views on bankers bonuses or currency related questions please feel free to make a comment.
Tom Hampton
Analyst – Caxton FX
For the latest forex news and views, follow us on twitter @caxtonfx and sign up to our daily report.
The euro has managed to claw back a few points against the pound; however the pair have remained within a fifty pip range and near the four month high. The general opinion within the market seems to be for GBP to make further gains against the seventeen nation currency. Focus is fixed firmly on Portugal’s bond auction tomorrow. The question as to whether the more indebted nations within the EU can raise money is keeping EUR very much on the back foot. If the Portuguese do not manage to raise the necessary funds from the debt market, they will be forced to turn to the EU and IMF for financial aid.
Further bond auctions on Thursday for Spain and Italy could set the tone for the next few months, despite China and Japan’s rescue efforts.
In other news, it is bonus season for many city institutions and rumours are rife. JP Morgan are reported to be sharing £4.2billion between their 11,000 staff in London, the question of how big the bonus pool is at RBS is making politician’s blood boil and now Barclay’s is finding its name in the tabloids crosshair. Why? Well, the points outlined are based around the use of Cayman Island bank accounts to minimise the amount of tax paid in the UK and US. Which financial institution doesn’t? Surely we should revere a bank that made it through the financial crisis without needing to be bailed out? Surely we should take notes on the fact they came through the bad times having picked up some of the best bits of some failing companies? And, surely Bob Diamond deserves his £8million far more than Stephen Hester deserves his £2.5million?
If you have any strong views on bankers bonuses or currency related questions please feel free to make a comment.
Tom Hampton
Analyst – Caxton FX
For the latest forex news and views, follow us on twitter @caxtonfx and sign up to our daily report.
Friday, 7 January 2011
Sterling start to the New Year
The pound’s outperformance continued through until the end of the year’s first trading week, taking the price over €1.20 for the first time since September 17th 2010.
On the afternoon of Thursday 6th Caxton FX sent copy to the FT for Saturday publication. The feature discussed whether or not the euro would reach 1.20 in 2011; before close of play Friday the euro had already reached this level. The speed at which the rate rose (4.0% in 4 days!) indicates just how quickly the market is shifting at present. This high level of volatility highlights the importance of regular and accurate analysis - sign-up for daily analysis from Caxton FX.
The question now is, will the rise in the euro continue unabated, or will it reach a plateau? All comments welcome...
Duncan Higgins
Currency Market Analyst
Caxton FX
On the afternoon of Thursday 6th Caxton FX sent copy to the FT for Saturday publication. The feature discussed whether or not the euro would reach 1.20 in 2011; before close of play Friday the euro had already reached this level. The speed at which the rate rose (4.0% in 4 days!) indicates just how quickly the market is shifting at present. This high level of volatility highlights the importance of regular and accurate analysis - sign-up for daily analysis from Caxton FX.
The question now is, will the rise in the euro continue unabated, or will it reach a plateau? All comments welcome...
Duncan Higgins
Currency Market Analyst
Caxton FX
Sterling romps ahead
After a very flat morning, sterling has made significant gains against most of its counterparts following worse-than-expected data from the US.
Despite poor PMI figures earlier in the week, the pound has managed to make up almost four cents against the euro (from €1.1591 on Monday to a high of €1.1970 today) and buck its downward trend against the US dollar.
Following a string of poor results this morning from the eurozone, GBP/EUR remained relatively flat as the market waited for the outcome of the US Non-Farm Payroll. The figure came in some 56,000 below expectation at 103,000. However, the more telling data for the pair may well have been that the unemployment rate fell from 9.7% to 9.4%.
The subdued mornings play suddenly erupted as the Reuters screen froze and refused to give a real number until the market settled down and the computer could catch up. The raging pound then shot up to €1.1969 from just under €1.19 and has spent the past hour yo-yoing up and down before coming to rest around €1.1950. The pound has now risen by almost 5% against the 17-nation currency in only four days.
Although I have waxed lyrical about today’s wild throws of trading, the truth is, as stated in the blogs of the past two days, the single currency is in a dire situation and the market will use any excuse to abuse it.
The poor numbers from across the pond at lunchtime have helped sterling stem its losses against the greenback today. However, this is more than likely to be just a blip. The theme of USD strength is set to continue until the Fed’s second round of QE abates (officially June 2011). Beyond the $600billion injection, it is hard to see exactly what will happen to the dollar, however the likely outcome would be a spell of weakness.
Indeed, JP Morgan has gone so far as to estimate EUR/USD hitting $1.48 by year end. Is this too much of a turnaround? Certainly a turnaround is expected in the latter half of the year as monetary policy in the US stays loose whilst Europe looks too tighten. But surely the debt crisis in the EU is not close enough to a resolution to warrant a move of that level, particularly as the price could drop as low as $1.20.
In other news, well done England on winning their first test series in Australia since 1986. For a good laugh at an Aussie journalist, have a read of this article.
Tom Hampton
Analyst – Caxton FX
For the latest forex news and views, follow us on twitter @caxtonfx and sign up to our daily report.
Despite poor PMI figures earlier in the week, the pound has managed to make up almost four cents against the euro (from €1.1591 on Monday to a high of €1.1970 today) and buck its downward trend against the US dollar.
Following a string of poor results this morning from the eurozone, GBP/EUR remained relatively flat as the market waited for the outcome of the US Non-Farm Payroll. The figure came in some 56,000 below expectation at 103,000. However, the more telling data for the pair may well have been that the unemployment rate fell from 9.7% to 9.4%.
The subdued mornings play suddenly erupted as the Reuters screen froze and refused to give a real number until the market settled down and the computer could catch up. The raging pound then shot up to €1.1969 from just under €1.19 and has spent the past hour yo-yoing up and down before coming to rest around €1.1950. The pound has now risen by almost 5% against the 17-nation currency in only four days.
Although I have waxed lyrical about today’s wild throws of trading, the truth is, as stated in the blogs of the past two days, the single currency is in a dire situation and the market will use any excuse to abuse it.
The poor numbers from across the pond at lunchtime have helped sterling stem its losses against the greenback today. However, this is more than likely to be just a blip. The theme of USD strength is set to continue until the Fed’s second round of QE abates (officially June 2011). Beyond the $600billion injection, it is hard to see exactly what will happen to the dollar, however the likely outcome would be a spell of weakness.
Indeed, JP Morgan has gone so far as to estimate EUR/USD hitting $1.48 by year end. Is this too much of a turnaround? Certainly a turnaround is expected in the latter half of the year as monetary policy in the US stays loose whilst Europe looks too tighten. But surely the debt crisis in the EU is not close enough to a resolution to warrant a move of that level, particularly as the price could drop as low as $1.20.
In other news, well done England on winning their first test series in Australia since 1986. For a good laugh at an Aussie journalist, have a read of this article.
Tom Hampton
Analyst – Caxton FX
For the latest forex news and views, follow us on twitter @caxtonfx and sign up to our daily report.
Thursday, 6 January 2011
The euro’s slide continues
Despite disappointing data from both the UK and US, the euro has not been able to make up any lost ground.
Sterling did take a slight knock this morning as the UK’s Services PMI figure came in at 49.7, well below the expected result of 52.9. However, any losses were soon regained and the pound hit an intraday high of €1.1855 against the single currency.
Aside from some slightly disappointing employment data, the greenback continues to climb. The euro is now just a shade away from collapsing below $1.30 and who would bet against the move coming as early as tomorrow?
The 17 nation currency continues to go from bad to worse. What would normally be bullish news, a successful Portuguese bond auction, turned sour as the premium Portugal will have to repay went up by well over 100 points. The news that the EU is potentially going to issue Europe wide bonds (rather than country specific) smells horribly like the actions bankers took in combining securities that got the world in this mess in the first place. Next week Italy and Spain will both have their first bond auctions of 2011. It will be very interesting to see what premium they will have to pay to secure finance. All-in-all, this storyline has legs and will dominate most of 2011.
In other news, well not that far from the apple tree, China’s shopping spree for entire nations (behind FT paywall) continues as they pledge to buy €6billion of Spanish debt. This is being viewed as a simple engagement to try to open up foreign markets to Chinese exports. However, with their cheaper yet comparable products, ownership of foreign government debt, vast currency and commodity reserves, could this be just another move to knock America from the top of global economics?
Tom Hampton
Analyst – Caxton FX
For the latest forex news and views, follow us on twitter @caxtonfx and sign up to our daily report.
Sterling did take a slight knock this morning as the UK’s Services PMI figure came in at 49.7, well below the expected result of 52.9. However, any losses were soon regained and the pound hit an intraday high of €1.1855 against the single currency.
Aside from some slightly disappointing employment data, the greenback continues to climb. The euro is now just a shade away from collapsing below $1.30 and who would bet against the move coming as early as tomorrow?
The 17 nation currency continues to go from bad to worse. What would normally be bullish news, a successful Portuguese bond auction, turned sour as the premium Portugal will have to repay went up by well over 100 points. The news that the EU is potentially going to issue Europe wide bonds (rather than country specific) smells horribly like the actions bankers took in combining securities that got the world in this mess in the first place. Next week Italy and Spain will both have their first bond auctions of 2011. It will be very interesting to see what premium they will have to pay to secure finance. All-in-all, this storyline has legs and will dominate most of 2011.
In other news, well not that far from the apple tree, China’s shopping spree for entire nations (behind FT paywall) continues as they pledge to buy €6billion of Spanish debt. This is being viewed as a simple engagement to try to open up foreign markets to Chinese exports. However, with their cheaper yet comparable products, ownership of foreign government debt, vast currency and commodity reserves, could this be just another move to knock America from the top of global economics?
Tom Hampton
Analyst – Caxton FX
For the latest forex news and views, follow us on twitter @caxtonfx and sign up to our daily report.
Wednesday, 5 January 2011
Sterling is merely a spectator as the euro slumps against the US dollar
Despite worse than expected construction data from the UK, sterling has made gains against most of its major counterparts as it tracks the US dollar higher.
Positive employment data from the US and continuing fears about the eurozone debt crisis have sent the greenback higher with the pound hanging on to its coattails. A report showing that US companies created almost three times as many jobs in December than expected helped the US currency make its largest gains in almost three months. USD has recouped all losses made against the yen since new year’s eve and taken it back to pre-Christmas levels against the overinflated Swiss Franc.
Continuing issues in the eurozone will be the general theme for 2011 with a possible break-up of the single currency the most extreme prediction from some analysts (see this piece by Harry Wilson in The Telegraph). While this is unlikely, pressure from the stronger EU nations for a resolution could well lead to a state of greater fiscal union with Germany inevitably picking up the pieces.
Reading ‘Peston’s Picks’ from the BBC, I was interested to see his views on the Ipsos Mori survey published today. The survey outlines that FTSE 350 leaders are more upbeat about the start of 2011 than they were in 2010, despite heavy handed austerity measures. Mr Peston goes on to point out that despite muted optimism in early 2010, no one saw the collapse of Greece and Ireland (although according to this BBC piece his colleague James Robins, the BBC Diplomatic correspondent, did exactly that) . What will 2011 have in store for us?
In other news, further integration of China into the world economy took a leap forward as the World Bank has issued its first bond denominated in the Chinese yuan. The international lender could have plans afoot to make China its third largest stakeholder after the US and Japan.
And finally, pun’s about the state of the single currency reached fever pitch as Estonia has been enveloped into the EU’s economic bosom. Apparently, a cow in Tallinn, Estonia’s capital, offers an excellent exchange rate of one kroon to one euro, fifteen times better the actual exchange rate. Well, where there’s muck there’s brass! (sorry)
Tom Hampton
Analyst – Caxton FX
For the latest forex news and views, follow us on twitter @caxtonfx and sign up to our daily report.
Positive employment data from the US and continuing fears about the eurozone debt crisis have sent the greenback higher with the pound hanging on to its coattails. A report showing that US companies created almost three times as many jobs in December than expected helped the US currency make its largest gains in almost three months. USD has recouped all losses made against the yen since new year’s eve and taken it back to pre-Christmas levels against the overinflated Swiss Franc.
Continuing issues in the eurozone will be the general theme for 2011 with a possible break-up of the single currency the most extreme prediction from some analysts (see this piece by Harry Wilson in The Telegraph). While this is unlikely, pressure from the stronger EU nations for a resolution could well lead to a state of greater fiscal union with Germany inevitably picking up the pieces.
Reading ‘Peston’s Picks’ from the BBC, I was interested to see his views on the Ipsos Mori survey published today. The survey outlines that FTSE 350 leaders are more upbeat about the start of 2011 than they were in 2010, despite heavy handed austerity measures. Mr Peston goes on to point out that despite muted optimism in early 2010, no one saw the collapse of Greece and Ireland (although according to this BBC piece his colleague James Robins, the BBC Diplomatic correspondent, did exactly that) . What will 2011 have in store for us?
In other news, further integration of China into the world economy took a leap forward as the World Bank has issued its first bond denominated in the Chinese yuan. The international lender could have plans afoot to make China its third largest stakeholder after the US and Japan.
And finally, pun’s about the state of the single currency reached fever pitch as Estonia has been enveloped into the EU’s economic bosom. Apparently, a cow in Tallinn, Estonia’s capital, offers an excellent exchange rate of one kroon to one euro, fifteen times better the actual exchange rate. Well, where there’s muck there’s brass! (sorry)
Tom Hampton
Analyst – Caxton FX
For the latest forex news and views, follow us on twitter @caxtonfx and sign up to our daily report.
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