NEW YORK -(Dow Jones)- The euro rose Wednesday in uneven trading, retreating below $1.38 as cautious optimism over a European bailout deal gave way to mounting skepticism that a final solution will solve the euro zone's debt crisis. In advance of a pivotal weekend summit, France and Germany are locked in intensive negotiations on whether investors in Greece's nearly $500 billion stack of distressed debt will be asked to take a significantly larger writedown on their holdings. European leaders are also mulling a range of options on how to buttress the European Financial Stability Fund. On Tuesday, the euro surged on a report from The Guardian that European policymakers may more than quadruple the EFSF from its current EUR440 billion. While numerous officials acknowledge a deal is in the works, they have vigorously diminished the prospect of a final solution exceeding EUR1 trillion. According to many analysts, that sum would fall short of the necessary resources to simultaneously shore up Greece and protect Italy and Spain, both of which are seen as increasingly vulnerable to contagion risks in the event of a Greek default or hard restructuring. "You see the outlines of a solution, but there are a tremendous number of loose threads hanging there," said Steven Englander, head of G10 strategy at Citigroup in New York. European leaders are "smelling the coffee but at some point the market will pull on them and everything will unravel," he said. In early trading, the euro flirted with levels just below $1.39 but pared those gains as traders mulled whether Europe's efforts--after so many false dawns--would provide the clarity the market desperately needed. The single currency was up 0.23%, trading near $1.3785. The dollar bought Y76.81, virtually unchanged from Tuesday's close, and the euro rose 0.20% to trade around Y105.94.
Access Investments-Building Awareness - European Union-ROMANIA
Thursday, October 20, 2011
NEW YORK -(Dow Jones)- The euro rose Wednesday in uneven trading, retreating below $1.38 as cautious optimism over a European bailout deal gave way to mounting skepticism that a final solution will solve the euro zone's debt crisis. In advance of a pivotal weekend summit, France and Germany are locked in intensive negotiations on whether investors in Greece's nearly $500 billion stack of distressed debt will be asked to take a significantly larger writedown on their holdings. European leaders are also mulling a range of options on how to buttress the European Financial Stability Fund. On Tuesday, the euro surged on a report from The Guardian that European policymakers may more than quadruple the EFSF from its current EUR440 billion. While numerous officials acknowledge a deal is in the works, they have vigorously diminished the prospect of a final solution exceeding EUR1 trillion. According to many analysts, that sum would fall short of the necessary resources to simultaneously shore up Greece and protect Italy and Spain, both of which are seen as increasingly vulnerable to contagion risks in the event of a Greek default or hard restructuring. "You see the outlines of a solution, but there are a tremendous number of loose threads hanging there," said Steven Englander, head of G10 strategy at Citigroup in New York. European leaders are "smelling the coffee but at some point the market will pull on them and everything will unravel," he said. In early trading, the euro flirted with levels just below $1.39 but pared those gains as traders mulled whether Europe's efforts--after so many false dawns--would provide the clarity the market desperately needed. The single currency was up 0.23%, trading near $1.3785. The dollar bought Y76.81, virtually unchanged from Tuesday's close, and the euro rose 0.20% to trade around Y105.94.
Subscribe to:
Post Comments (Atom)
3 comments:
As usual, there is no agreement, despite all the protestations to the contrary, and even if there is, it is a silly bloody plan anyway, it wont work. This is what passes for crisis management in the EU. The EU is not the solution, it is the problem.
Flashman
there are still those who do. What is reported in the media is a mere snippet of hours of discussions - and I am sure that Frau Merkel will have used the backstop of the Bundestag to dampen Sarkozy's ardour.
"France's Nicolas Sarkozy and Germany's Angela Merkel hold crisis talks"
Again?
Angela, "Well Nick how nice to see you after all this time. Have you thought of anything useful since we last met?
Nick looking blank and harrassed at the same time, "Hello Angie, Yes I am thinking that UMP could have Open Primaries long after I am dead"
Angela, "Nein, Nein, Nick I meant about the fact that France has run out of money and wants the German taxpayer to bail it out - forever. You know that we Germans may be a bit slow but some members of the Bundestag think that this may be a good time to place a big order with Krupps"
Nick, "A big order? Why dont we make this a Franco/German project symbolic of our political will which we could locate in Toulouse?"
Angela, "Nein, Nein, Nick please pay attention - things are getting serious - that perfidious Albion, Sir Mervyn King has suggested that it is the socialist welfare state that has to be dismantled throughout the Western World. He is beginning to get the masses to believe that it is not the banks fault but us politicians"
Nick, rising to his full Napoleonic height, "I need to change my underwear"
To be continued at the next crisis summit...
Jonathan
Post a Comment