The weekend has provided more and more ammunition for those traders
looking to have a pop at the European single currency. After
Jean-Claude Trichet's inflation jig on Thursday which reinvigorated
the euro like Popeye after a tin of spinach, Friday traders became
more circumspect and clipped off their profits before today's low
liquidity US bank holiday. Once again however, it has been one of the
PIIGS that has garnered the headlines.
The Irish political situation has taken and inevitable turn and,
following resignation rumours last week, a vote of no confidence has
been called for the premiership of Brian Cowen. Even his own Finance
and Foreign Ministers have come out and said that they will be voting
against him. This has weakened the euro in this morning's Asian
session and will keep it under pressure until the vote has been cast.
News from Germany has also caused the euro to wobble on a more
fundamental basis as opposed to purely sentiment. German political
parties are becoming increasingly split on whether the European
Financial Stability Fund should be increased. This matter will be
near, if not at the top, of the agenda at today's meeting of EU
finance ministers.
The pound enjoyed Friday as the inflationary pressures that we have
been telling you about for a while are becoming more and more present.
UK PPI jumped higher by a whopping 3.4% against the predicted 1.5%
rise as the effect of oil price increases became even more telling.
CPI is out on Tuesday and a jump is also likely and only increases our
belief that further QE in the UK is very unlikely.
Given it is a US bank holiday there is little to report on today's
data calendar and focus will once again centre on Europe through the
meeting of its finance ministers.
!! Latest Exchange Rates At Time Of Writing !!
Rates are dependent on amount transacted.
Source: Fxstreet.com
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