FOREX-NATION

There’s not much else to the story besides the headline, but what a headline in a time such as this. This is perhaps a big reason for the most recent huge spike upwards. Here’s the link. I’m having an issue with hyperlinks so you’ll have to copy and paste it into your browser’s address bar. I know, I know,  I should just fix the problem instead.

http://www.xe.com/news/2010-05-20%2013:16:00.0/1160325.htm?c=1&t=

Yesterday we saw another collapse on the euro just as signs that the currency had begun to dust itself off appeared. Germany’s move to ban naked short sales of euro-denominated government bonds, credit default swaps based on those bonds, and shares in Germany’s 10 leading financial institutions was not taken as brilliant regulatory measure but instead as another major blunder by the ruling powers in Germany, truly a huge mistake in both timing and reasoning. What this ban means is that Germany banned naked short selling (selling something without having first bought it, or any plans to do so in the future) in shares of 10 financial institutions; CDS on European

Continue reading–>EUR/USD Wrap Up for May 19

The most recent spike downward has been caused by a report from Reuters that Merkel will announce a ban on naked short-selling of stocks and European government bonds tomorrow. Short-sale bans  on shares have been used as temporary measures in the wake of the Lehman collapse but this is the first ban on the sale of government bonds! It is a big negative from a macro perspective for reserve managers who want big, deep, free capital markets in the markets in which they invest. IF this is more than a temporary measure, if could be a major euro negative. This also changes my outlook in the fundamental analysis I just posted, but I’m stressed for time now so I won’t

Continue reading–>NEWS FLASH: New Short Sell Ban to be Announced!

After the first $110 billion aid package failed miserably to alleviate market fears, instead sending them into a tailspin last week because it was literally too little too late, the even larger $720 billion EU/IMF rescue package appears to have fallen flat on the markets this week, although it has appeared to calm markets considerably from last week, reflected by the Greek 5 year credit default swap of 484 bps from 510.5 bps at New York close Tuesday and the lack of any further extension of the major downtrend. Also lending to the recent rally attempts was demand for euro’s as a result of Germany’s 2-year 7 bln euros auction and

Continue reading–>EUR/USD Continues to Waiver

Who says markets don’t give you a second chance?

A decidedly different tone in the markets today, as the EUR/USD is trading appreciably firmer after global authorities met over the weekend to try and stem Greece-induced contagion. Obviously the first package which was rushed through in order to calm market fears was too little too late. Now global authorities have come up with a 720 bln euros (approx $1.0 trln) financial assistance package designed to stop Greece-induced contagion from spreading (sounds like the plague or something). The 720 bln is broken down as follows; government-backed loan guarantees and bilateral loans worth up to 440 bln provided by eurozone members, 60 bln

Continue reading–>EUR/USD Finds New Strength

EUR/USD sunk as low as 1.2691 from 1.2850′s after a flat Asian session lead into a volatile European one . One big change is that the bulls have at least began to put up a fight again, although one could also argue that the recent rallies stem from short covering and profit taking just as well. European traders started the morning with another large sell-off, with hedge funds, Russia and surprisingly the BIS notable sellers just above the low 1.2800′s. The session low seemed to have found a bottom at 1.2730 from where we bounced smartly amid reports of a “well respected” fund buying decent amounts. Not to be

Continue reading–>EUR/USD Wrap Up: Risk Aversion Remains Strong

Serious selling pressure mounts against the euro as a rumor that Spain will ask for 280 billion euros of aid money in order to deal with its debt has sent the pair plummeting. The fact that that nation also has a 20% unemployment rate doesn’t lend investors any confidence either. Spain’s Prime Minister Zapatero made a statement addressing today’s rumors saying: Rumors can damage Spain’s interests and that is intolerable. The rumor is complete madness, he says.

Zapatero’s comments fell flat on the markets as the EUR/USD started the European session around 1.3200 and it was full on sell-off from there as the pair continues to make new yearly lows every hour. Combine

Continue reading–>Risk Aversion Soars

Risk aversion weakens and jitters seem to have resided somewhat for the euro as comments out of Germany reassure the markets that the debt relief package is on its way. Hard-line comments from German officials early into the week sent the markets into a panic, but as I already mentioned in the above post, these comments were mostly posturing by German politicians and not serious attempts to block any debt relief, though much damage has been done along the way. The German Bankers Association renewed their warnings of contagion effect on the other less-than-perfect euro zone countries if quick action is not taken on Greece. This was one example of renewed urgency in German comments over the last 24-hours, highlighting the

Continue reading–>EUR/USD Wrap Up for April 29

Fundamental data out of the U.S. and Euro zone paint a very murky picture as of today, as concerns over financial regulation in the U.S. is put on center stage today with Goldman Sach’s CEOs testifying before congress in the U.S., while  Greek unions declare they will strike May 5 against austerity, Germany continues to stall finalizing the aid package, and 10 year bonds spreads are up to a full 4 points today (U.S. 10 year bonds trade at 1/64th of a point for comparison).

EUR/USD continues to rally and then fade as more news from Germany weighed down the  recent rally attempts. A German coalition member recommends a Greek debt restructuring in order to get aid. Not a crazy idea

Continue reading–>EUR/USD Wrap Up April 27th