Which is in recession? Italy, Belgium, Greece, Netherlands, Spain, Portugal. Listen to the currency podcast to find out.. .By james tweed • Feb 20th, 2012 • Category: Currency
Significant items this week:
Mon 20th Feb US bank holiday – Presidents day.
Tues 21st Feb UK – Public Sector borrowing
Wed 22nd Feb UK – MPC minutes of last interest rate meeting
Thurs 23rd Feb EU – German IFO business climate
Fri 24th Feb UK – Q4 GDP
US – Michigan consumer confidence.
Thank you for downloading the foreign exchange market report podcast for February 20th from Coracle Online and Crossbar fx.
The USD and the Euro had a very volatile week last week as they reacted to headlines and market speculation about the imminence of a deal in Greek debt. Eurozone politicians are due to meet today, the 20th, to rubber stamp a 130 billion Euro package. Any deal reached is expected to launch a short term rally in the Euros and risk will be on again – the USD will no doubt weaken. If there is no agreement then nerves will be frayed as the March deadline looms and in this circumstance the USD could well strengthen as risk comes off the agenda. Whatever the outcome in Greece, policy makers need to make sure that the markets are convinced Greece is a one-off and that Portugal and Ireland are not going to go through the same laborious process to deal with their looming debt issues.
Economic data for the US continues on the upside while Europe’s begins to show signs of a possible double dip… The German economy shrank 0.2% in the last quarter, Italy fell 0.7%, and the Netherlands were down 0.7%. France was the one bright star, showing growth of 0.2% last quarter. For 2011 France grew 1.7% in total and Germany 1.5% overall. Officially in recession now are Italy, Belgium, Greece, Netherlands, Spain, and Portugal.
The Pound continued to rise against other major currencies last week, shrugging off a threat to the UK’s triple A rating, the market instead concentrated on a string of positive economic data. Retail sales out performed market forecasts and came in at 0.9% in January following the 0.6% rise in December. Inflation fell to 3.6% which was a 14 month low. RPI dropped to 3.9% , mainly due to last Januarys VAT increase falling out of the annual figure. On the downside the unemployment number continues to rise – 2.67 million now, 8.4% of the work force.
Thanks for listening