Currency market report for June 11By james tweed • Jun 12th, 2012 • Category: Currency
Significant items this week:
Tues 12th UK – Industrial production, Manufacturing production
US – Monthly budget statement
Wed 13th EMU – EMU Industrial production, German CPI
US – Retail sales
NZ – RBNZ – Interest rate decision – no change expected
Thurs 14th Switzerland – SNB Interest rate decision
EMU – EMU monthly report, CPI
US – CPI, Continuing jobless claims
Fri 15th EMU – ECB Presidents speech/report
Japan – BOJ interest rate decision
US – Industrial productions, Michigan consumer sentiment index
Thanks for downloading the currency market report from Coracle Online and Crossbar fx for June 11th 2012. == Coracle is moving office at the moment. Until we’re settled in, the report is written only. Audio will return soon! ==
After a short 3 day week in the UK due to Jubilee celebrations the economic news was focused around Europe last week, and continues to be so as this week gets under way. After much debate last week, Spain finally agreed they needed bailing out, although they stress that it is their banks that do, not the country itself. Either way the exact amount is yet to be confirmed but 125 billion Euros seems to be the sort of sized sticking plaster required. And that’s all it is, a plaster, it shouldn’t be confused with surgery and a permanent economic solution. It buys time for the Eurozone group of finance ministers and the ECB and the IMF to decide how far are they going to go with all of this bailing out. At the moment they’re all of the opinion that if one country fails, or their banks do, then everyone will pay the price. The FX and other markets seem to agree.
In other news last week was the downgrading of 6 German banks. Proof that they’re not immune to the poor lending practices of times gone by. Other news includes China cutting their interest rates for the first time since 2008 in an attempt to boost slowing growth.
Both the ECB and the Bank of England left rates unchanged last week, and neither did the Bank of England increase the UK’s asset purchasing programme, known as Quantitative Easing or QE. There was much speculation they would, but in the end just announced that they are watching the situation closely. The Prime Minister predictably said the only thing he could: that the EMU must sort itself out otherwise we shall all bear the consequences. Global economies are so interwoven that one banks problems in Spain are also a problem for UK banks… such is the level of lending between them. A few million pounds is the banks’ problem, a few 100 billion becomes the countries problem. A trillion and it’s the Global economies problem.