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Tag Archive | "interbank fx trading"

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EU Leaders May Create Permanent Aid Mechanism


Juncker Says Permanent Aid Mechanism Necessary for EU

The ongoing Greek debt crisis has prompted European finance ministers to consider creating a permanent mechanism to deal with economic crises in the Euro Zone.  Luxembourg Prime Minister Jean-Claude Juncker addressed a news conference in Madrid and stated, “We’ve reached an agreement that we need to set up a permanent crisis (resolution) mechanism.” The European Commission and the European Union executive plan to announce the proposals on May 12th. The recent drive to establish an aid mechanism for Greece prompted EU leaders to consider creating a permanent mechanism to deal with similar crises in other EU nations. The Athens government is seeking clarification on how the loan mechanism would work.  Greek Prime Minister George Papandreou told parliament that any request for aid would be made in the nation’s best interest. Papandreou stated, “We are taking all the preparatory actions required.” The Athens government has already implemented several austerity measures including wage and pension cuts, tax hikes and greatly reduced spending. The European Commission, European Central Bank and the IMF will meet with Greek officials on Monday to discuss the details of what will be the first bailout of an EU member nation. European Economic and Monetary Affairs Commissioner Olli Rehn stated, “It is a matter of preparing a joint program of conditionality and financing if needed and if requested.”

Greece Asks For EU/IMF Talks

In a letter released to the media on Thursday the Athens government said it was asking for talks with EU officials and the IMF. Many analysts believe this is the first step in asking for outside aid.  Luxembourg Prime Minister Jean-Claude Juncker said that at the present time Greece has not asked for activation of the loan mechanism. Borrowing costs have made it difficult for Greece to re finance its debt. The spread between Greek and German bonds widened to 440 basis points. A recent poll showed that a majority of Greeks support Prime Minister Papandreou but remain unhappy about tax increases and pay freezes. Two thirds of Greeks support the current government over the conservative opposition and Papandreou’s support is at 68%.

Establishment of European Monetary Fund Proposed

German Finance Minister Wolfgang Schaeuble said in a newspaper interview that he planned to introduce proposals on the establishment of a European monetary fund to ensure EU economic stability. EU Commissioner Rehn proposed that policy coordination improvements should include EU reviews of member states draft budgets before they are approved by national parliaments. ECB Governing Council member Mario Draghi said that proposals for changes in EU rules are in the embryonic stage. Draghi stated, “There is still a great lack of detail and we are still at an extremely early stage. It’s still under discussion and no one has a clear idea.”

Quick Forex Tip: Interbank fx trading determines pricing in all levels of currency markets. Spreads available to interbank traders are sharp and unavailable to outsiders. Interbank traders who can guarantee a large number of transactions for large amounts can demand a smaller spread between the bid and ask price. Unfortunately these same spreads are not available to the average investor making relatively small transactions. Thus, for the average investor to participate in interbank fx trading, s/he must do so through the use of a broker.

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Soros Warns of Greek ‘Death Spiral’


High Borrowing Costs For Greece

On Tuesday the euro fell against most major currencies as Greek worries persist and investors remain concerned about flat euro zone economic growth. Greece managed to pull off a successful T-bill sale but borrowing costs for the debt ridden nation remained high. Billionaire investor George Soros said that Greece faces a ‘death spiral’ due to high borrowing costs. At a London event organized by the well known magazine The Economists Soros said, “While it’s better than what the market is currently willing to offer, it’s still rather high. It is a question of solvency. If you start charging very high rates as the market does in anticipation of solvency then that pushes you into insolvency.” Soros also pointed out that “Concessional rates” would help Greece to address its massive debt and “fulfill their target.” Soros pointed out that “If they don’t, they have then to tighten even further, then your tax receipts go down and the economy goes further into tanking and then you go into a death spiral. That is the danger that is still remaining.” Soros said that the Greek crisis could threaten the euro and the European Union itself. Soros stated, “The consequences of Greece leaving the euro would be the disintegration of the euro. The disintegration of the euro would take a very long way toward the disintegration of the European Union.”

Slow Euro Zone Growth a Concern

The high premium investors demand to hold Greek debt indicates that investors and traders are uncertain that Greece can manage its own problems without outside aid. Slow euro zone growth remains a concern for many investors. Vassili Serebriakov of Wells Fargo in New York stated, “Even though we had a pretty good Greek auction today, people are still finding few reasons to buy the euro in the medium term. Growth prospects are still quite subdued in the euro zone compared to that of the U.S. That’s what really preventing a strong bounce in the euro.”

Permanent Damage to Euro

In addition to Soros many analysts and economists have a negative outlook for Greece and the future of the euro. Some point out that a lack of political unity will hamper Greece’s prospects. David Gilmore of FX Analytics said, “Even if we assume that Greece and the Euro zone muddle through this crisis and Greece avoids default, there should be permanent damage to the euro. Greece has exposed two key flaws in EMU (European Monetary Union)…monetary union without political union and economic divergence with one monetary policy. I don’t forecast a Greece default, just a rising cost for Euro zone for keeping Greece in EMU.”

Quick Forex Tip: Interbank forex dealers have access to better spreads than the average investor because of the size of the transactions. Small investors who want to trade interbank fx now have access through the use of forex brokers who are able to put together large transactions. Additionally, many very wealthy individuals trade interbank fx hoping to profit from currency fluctuations. Whether you have a lot or a little money to invest, interbank forex trading is a great option because forex markets are almost recession proof.

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Germany Drops Opposition to Subsidized Loans


Germany Agrees to Greek Loans

German Chancellor Angela Merkel’s government is dropping opposition to Greek aid and is prepared to offer Greece loans at below market rates. Rates would be above those charged by the IMF which will participate in the rescue plan along with the EU.  The loan arrangement will address German opposition to subsidized loans. Recent reports indicate that Greece may receive loans for 20 to 25 billion Euros at a rate of 5%. German opposition to subsidized loans had threatened rescue efforts and public opposition to subsidized loans for Greece is widespread in Germany. Billionaire investor George Soros said, “They have to be given some help from Europe or the IMF at concessional rates. It is a make or break time for the euro and it’s a question whether the political will to hold Europe together is there or not.”

Lack of Clarity in EU/IMF Agreement

The European Commission said it will hold a news conference after Sunday’s teleconference between Euro Zone finance ministers. The European Central Bank and the European Commission will also participate. Under the terms of the March EU/IMF agreement the EU will provide more than half of the loans and the IMF will provide the rest. The loan mechanism would be triggered if Greece runs out of funding options. Greece received even more bad news this week after Fitch’s ratings agency downgraded Greece to BBB-, just above ‘junk’ status. Fitch’s outlook for Greece remains negative. In a statement Fitch’s said, “The lack of clarity regarding the mechanism for timely external financial support may have hindered Greece’s access to market finance at affordable cost and hence further undermined confidence in the capacity of the government to meet its fiscal targets.”So far this year the euro has fallen 6% against the US dollar. The lack of clarity in the EU/IMF agreement has been cited as one of the reasons Greece’s borrowing costs remain so high. Greek Prime Minister George Papandreou has repeatedly said that Greece needs below market costs to cut Greece’s massive deficits.

Greece Has Not Asked For Aid

Although Greece has not yet asked for aid the Athens government considers Sunday’s teleconference important. Government spokesman George Petalotis told reporters, “Greece has not asked (for) the activation of the mechanism. It is an important step to detail the terms of the mechanism.” The effects of Sunday’s conference will not be felt until Markets open on Monday.

Quick Forex Tip: Interbank FX traders are at the top tier of the global forex market. A majority of all daily transactions in forex markets are conducted by traders from ten large banks. Despite market manipulation by central banks many economists have cited forex markets as closest to the ideal of perfect competition – meaning that no market participant is large enough to set currency prices. As a result, forex trading has become popular with smaller investors because forex markets offer investors the opportunity to profit during troubled times , allowing them to offset losses in other markets.

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Greece Pressured by High Borrowing Costs


Greece May be Forced to Seek Emergency Aid

Today’s decline in Greek asset prices may mean that the Athens government may be forced to seek emergency aid from the EU. Greek bond prices and bank stocks have fallen to a level indicating that market confidence has run out for the debt hammered nation. Greek 10 year bond spreads widened more than 40 basis points vs. German bonds to 461 basis points and during the last three days Greek bank stocks have fallen 14%. Panagiotis Dimitropoulos, treasurer at Millennium Bank in Greece stated, “Spread levels today are insane, they are not levels for a euro zone country. It seems Greece is being pushed toward the aid mechanism.”Greek officials have said that high interest rates demanded by investors make it difficult to finance the nation’s deficit. Greece may have no other choice than to access the safety net hammered out at last month’s EU summit. Under the agreement the EU would provide bilateral loans supplemented by IMF loans if necessary.  Political divisions between EU governments on how to handle Greece’s debt problems linger and the details of the loan mechanism have yet to be sorted out causing confusion among investors.

Credibility of Euro Zone at Stake

Should Greece apply for aid the loans could possibly be delayed for a long period and the amount available could fall short of what the Athens government actually needs. Under last month’s EU agreement a unanimous vote would be required to trigger any aid package. Opposition to any kind of aid for Greece remains high in Germany and Germany could possible delay and aid package for Greece3. News reports indicate that EU nations are split on what interest rates Greece would be charges under last month’s agreement. Germany and the Netherlands have called for higher rates to deter EU countries from undisciplined spending. Some analysts believe Greece will need loans totaling 20 to 50 billion Euros to resolve the nation’s debt crisis. Under this scenario markets would be concerned about Greece’s ability to meet the tough conditions of the EU loans. Should Greece turn to the IMF the credibility of the Euro Zone could be at stake.  Turning to the IMF would indicate to markets that the EU is not capable of solving a crisis in a member state.

Possible Greek Downgrade

Rating agency Standard & Poor’s said Greece could suffer a downgrade if high borrowing costs continue although the agency’s senior analyst for Greece Marko Mrsnik said the risk of a default is low. European Central Bank President Jean-Claude Trichet also said that there is no danger of default. Germany, which can block Greece’s access to the loan package said that the rescue package is a last ditch option and aid to Greece is politically unpopular in Germany.

Quick Forex Tip: The average investor usually participates in the interbank market through a broker who handles funds for a large group of investors. The large amount of money given to the broker gives him access to the favorable spreads available in the interbank market. For small investors there are a huge number of interbank FX reviews available online. These reviews give the average investor the ability to research the positives and negatives of the brokers reviewed. Most interbank FX reviews will detail customer service experiences, reliability and investment track records.

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Dollar May Hit Eight Month High vs. Yen


Dollar to Extend Recent Gains

According to Bank of Tokyo-Mitsubishi UFJ Ltd currency experts the US dollar may extend recent gains and hit an eight month high against the yen. Analyst Sumino Kamei stated, “In the short-term, the dollar will continue to be in an upward trend.” Kamei made his prediction using a ichimoku chart which predicts a currency’s performance by analyzing historic highs and lows of a particular currency. The chart’s conversion lines charts the sum of the currency’s highest high and lowest lows for the previous nine days. The chart’s baseline is the same calculation for the previous 26 trading days. Fibonacci analysis also predicts a dollar rise.  Fibonacci analysis is based on the theory that currency prices rise of decline after hitting a high or low. Using technical analysis traders and analysts study trading patterns and prices to predict changes in stocks, currencies, commodities or indexes.

Greek Concerns Linger

Using recent trading patterns Tokai Tokyo Securities Co. has predicted that the euro ham plummet to a thirteen month low of $1.2457. Yoh Nihei of Tokai Tokyo stated, “The euro may dip below $1.30 and test lower prices,” and also said that an ichimoku chart indicates that “the euro is still in a downtrend.”In Tokyo the euro traded at $1.3581 far short of last year’s high of $1.5144 in November. The euro has been pressures all year by investor concerns about the fiscal health of Greece and other EU nations. Last week’s agreement between the EU and IMF failed to slow the euro’s slide in currency markets. The greenback strengthened after the US Non Farm Payrolls report showed that US employers added about 160,000 new jobs in March. Nick Bennenbroek of Wells Fargo & Co. in New York stated, “A strong jobs report means a stronger dollar against most currencies, including the yen,. The core underlying trend in terms of overall private-sector hiring has probably turned positive in the first quarter of 2010.”

Dollar Gains on Jobs Report

Treasury Secretary Timothy  Geithner said that the jobs report showed that the US economy is ‘getting stronger’ and business investment is “coming back” but also said unemployment remains at unacceptable levels. The dollar gained on 13 of the 16 most traded currencies. Marc Chandler of Brown Brothers Harriman & Co stated, “It’s a dollar move. The dollar is cheap because it’s trading below fair-value models. And what does that mean? It means that U.S. labor costs are relatively cheaper compared to Europe, or maybe Japan, or the U.K. or Switzerland.” Trading is likely to be muted over the weekend Easter Holiday.

Quick Forex Tip: Interbank forex trading determines pricing in all levels of currency markets. Spreads available to interbank traders are sharp and unavailable to outsiders. Interbank traders who can guarantee a large number of transactions for large amounts can demand a smaller spread between the bid and ask price. Unfortunately these same spreads are not available to the average investor making relatively small transactions. Thus, for the average investor to participate in interbank forex trading, s/he must do so through the use of a broker.

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Aussie, Kiwi, Loonie Gain on Rising Commodities


Low Fed Rates Could Fuel Dollar Rally

Some currency Analysts believe that the Federal Reserve’s recent decision to keep rates at record lows could fuel a dollar rally against the euro and the British pound throughout 2010. Normally low central bank rates are negative for currencies but experts believe if the Fed’s low rated help to promote growth in the US economy that outpaces the euro zone and the UK the dollar will attract save haven investors throughout 2010. Recent economic reports indicate that the US is recovering from the recession at a faster pace than the euro zone and Britain. Many expect commodity linked currencies to rally vs. the dollar as commodity prices rise. Commodity linked currencies include the Australian dollar, the New Zealand dollar and the Canadian dollar. All of these countries have already raised rates and all have commodity driven economies. More than a few currency experts believe that the Canadian dollar will achieve parity with the US dollar sometime this year.

Aussie at Three Week High

On March 29th the Aussie dollar gained in advance of a report expected to show a rise in retail sales. The Aussie hit a three week high and most experts believe the Australian central bank will raise rates to 4.25%. The S&P/GSCI Index of commodities gained 0.5% and is near the highest level since March 19th prompting a rally in commodity linked currencies. The Aussie dollar gained 0.4% on the greenback trading at 92.16 U.S. cents and gained 0.6% on the euro trading at A$1.46. The Japanese yen fell 0.5% vs. the Aussie and traded at 85.24 per Australian dollar. The Canadian dollar rose 0.7% to C$1.0196 per U.S. dollar and most expect the currency to hit parity with the US dollar by June 2010.

Australian Central Bank to Raise Rates

Benchmark rates in Australia are currently 4% and are 2.5% in New Zealand. Australia is also in the enviable position of being one of China’s biggest suppliers of raw materials. These rates compared to US rates near zero and 0.1% in Japan makes the higher yielding Aussie and Kiwi attractive to investors. Reserve Bank of Australia Governor Glenn Stevens said that rates may be increased soon to control inflation. Stevens also said, “It’s not wise to leave interest rates right down at rock bottom any longer than you need. It would be not doing people any favors to have a prolonged period of very low rates and then hammer them unexpectedly.” The Kiwi gained in advance of a government report that is expected to show that home building approvals rose in February.

Quick Forex Tip: Interbank fx trading determines pricing in all levels of currency markets. Spreads available to interbank traders are sharp and unavailable to outsiders. Interbank traders who can guarantee a large number of transactions for large amounts can demand a smaller spread between the bid and ask price. Unfortunately these same spreads are not available to the average investor making relatively small transactions. Thus, for the average investor to participate in interbank fx trading, s/he must do so through the use of a broker.

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Dollar Expected to Gain on Upcoming Jobs Report


Dollar Will Continue To Strengthen vs. Euro Analysts Say

Many currency experts believe the US dollar will continue to strengthen against the euro as worries about the Greek debt crisis continue. The U.S. non-farm payrolls report for March is due this week and is expected to show that 168,000 new jobs were created and an unchanged unemployment rate. Analysts say that signs of economic improvement in the US could further support the greenback. A deal between the EU and the IMF to provide aid to debt ridden Greece has prevented a euro freefall but euro sentiment remains negative.  John McCarthy of ING stated, “Although we have this agreement on a Greece aid package, it is somewhat unclear as to whether it is going to be applied, when is it going to be applied…and the fact is Greece still has considerable debt. What’s to say that we will not go through this again with Greece or Portugal. This is not going away in the immediate future.” Some experts believe that the euro is in a long term downtrend similar to the US dollar’s seven year decline in advance of the global recession.

Experts optimistic About US Jobs Report

Aside from the continuing Greek concerns among investors most investors will be focused on the US employment report which is expected to show that the worst of the recession may be over. A research note from Danske Bank said, “Although the February data continued to print job losses, there are several signs the March U.S. payroll report is a very likely candidate for a significant upside surprise. This would overcome some of the skepticism about the current job market recovery.” Two other reports are due this coming week, the U.S. Institute Supply for Management report and the Chicago manufacturing survey. Both are expected to show that the US economy is recovering.

IMF Role in Greece’s Rescue Unclear

At last week’s EU summit European leaders agreed to provide loans to Greece with the IMF’s help. IMF officials were unclear on how IMF funds would be accesses and how it could impose the conditions that usually come with IMF aid. The IMF issued a statement saying, “We are following developments closely, And as we have said earlier, the Fund always stands ready to consider a request from a member country for our financial assistance.” The EU has indicated that they would provide two thirds of the funding for Greece and the IMF would provide the other third. Last Thursday Greek Finance Minister George Papaconstantinou said that Greece would prefer to obtain finds through financial markets but that will depend on interest rates.

Quick Forex Tip: Interbank forex dealers have access to better spreads than the average investor because of the size of the transactions. Small investors who want to trade interbank fx now have access through the use of forex brokers who are able to put together large transactions. Additionally, many very wealthy individuals trade interbank fx hoping to profit from currency fluctuations. Whether you have a lot or a little money to invest, interbank forex trading is a great option because forex markets are almost recession proof.

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Difficult Road Ahead For EU Summit


Investors Waiting For Greek Debt Solution

The euro rose from a ten month low vs. the US dollar as investors speculate that today’s EU summit could result in a solution for Greece’s fiscal problems. Diplomatic efforts in advance of the summit failed to resolve differences over how to aid Greece. France and Germany had held talks in advance of the summit to discuss what role the IMF will play in any Greek bailout. Jean-Claude Juncker, chairman of the euro zone finance ministers met with conservative EU leaders including German Chancellor Angela Merkel and said that he is confident that the EU summit will reach an agreement regarding aid to Greece by Thursday night. Junker stated, “My impression was that we would find an agreement today and now I do believe it really.”  Some currency experts remain pessimistic; Boris Schlossberg of GFT stated, “Some traders are betting European leaders will be able to come up with a solution at this meeting and the euro is responding to that. But frankly, I believe markets are bound for disappointment and the euro is likely to resume declines.”

Portugal Downgraded

Concerns about Greece’s debt sustainability and the debt concerns of other EU nations have pushed the euro down 7% against the greenback so far this year. On Wednesday Fitch’s ratings agency downgraded Portugal’s rating prompting concerns that other EU nations face similar debt problems. Matthew Strauss of RBC Capital Markets stated, “The focus is on the EU meeting, though expectations have been scaled down quite significantly on whether there will be a firm framework for financial assistance to Greece,. Based on recent comments, it seems that’s not going to be the case, and as a result, we’ve seen pressure on the euro.”  All eyes are on the EU summit and there have been conflicting statements from several EU leaders.

Greek PM Says Greece on the ‘Right Track’

The Athens government is hoping that a combination of tax hikes and wage cuts will bring Greece’s deficit to 8.7% of GDP this year. The 8.7% figure is still in excess of EU debt rules but well below last year’s 12.7% figure. Greek Prime Minister George Papandreou told reporters today, “We will move ahead whatever decisions are taken. Greece is determined to deal with its own problems,” he said, adding that “we are on the right track.” Some EU leaders believe that any solution involving the IMF will destroy the credibility of the EU and pressure the euro further. In a statement less than optimistic for those leaders pushing for an EU solution, Germany’s Merkel stated, “A good European is one who abides by the European treaties and national law and thus sees to it that the euro zone’s stability isn’t harmed.”

Quick Forex Tip: Interbank FX traders are at the top tier of the global forex market. A majority of all daily transactions in forex markets are conducted by traders from ten large banks. Despite market manipulation by central banks many economists have cited forex markets as closest to the ideal of perfect competition – meaning that no market participant is large enough to set currency prices. As a result, forex trading has become popular with smaller investors because forex markets offer investors the opportunity to profit during troubled times , allowing them to offset losses in other markets.

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EU Divided on Greek Aid in Advance of Summit


Nagging Greek Concerns Pressure Euro

Uncertainty about the prospect of an EU solution for Greece’s debt crisis continues to put pressure on the already troubled euro. Conflicting statements from EU leaders indicate that there is a serious political rift in the EU regarding aid to Greece. European Commission President Jose Manuel Barroso called for an EU based lending mechanism to be established at the EU summit this week. German opposition remains strong and German Chancellor Angela Merkel said in a radio interview that Greece does not have any “acute financial needs” and reiterated her opposition to any EU aid for Greece. Merkel stated, “I don’t see that Greece needs money at the moment and the Greek government has confirmed that. That’s why I’d urge us not to stir up turbulence in the markets by raising false expectations for Thursday’s council meeting. Aid will not be on the agenda at the meeting on Thursday because Greece says itself it doesn’t need help right now.”  Barroso responded to Merkel’s statements in the German newspaper Handelsblatt and said it was urgent that EU members solve the Greek debt problem “regardless of the political agenda in member states”. Barroso further stated, “Securing the stability of the currency union is in Germany’s interest. I’m sure Germany will make a constructive contribution to resolving the current crisis.”

German Opposition to Aid

After Barrsos’s comments were published the Merkel’s government issued a statement saying Merkel had spoken to Greek Prime Minister George Papandreou Saturday and Papandreou told Merkel his nation does not need any help. The statement said, “The Greek prime minister reaffirmed that Greece does not need any financial assistance.” Italian Prime Minister Silvio Berlusconi, told an election rally that he is “absolutely in favour” of EU aid to Greece. Berlusconi also stated that the EU had “no reason to exist” if member nations were not ready to provide each other aid. Germany is concerned that direct EU aid could set a dangerous precedent for other EU nations in financial straits.

Greece’s Borrowing Costs High

Up to now Greece has not formally requested aid from other euro zone members and is eager to see whether current austerity measures are enough to restore confidence in the troubled nation. High borrowing costs are making it difficult for Greece to implement many budget cutting measures. Prime Minister Papandreou warned that Greece is “one step from being unable to borrow” putting the Athens government in a difficult position. All eyes will be on the EU summit this week which could determine the future of the euro.

Quick Forex Tip: The average investor usually participates in the interbank market through a broker who handles funds for a large group of investors. The large amount of money given to the broker gives him access to the favorable spreads available in the interbank market. For small investors there are a huge number of interbank FX reviews available online. These reviews give the average investor the ability to research the positives and negatives of the brokers reviewed. Most interbank FX reviews will detail customer service experiences, reliability and investment track records.

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Greek Aid Plan Divides Euro Zone


Euro’s Credibility at Stake

The euro was introduced to global financial markets in 1999 and until recently the multi nation currency allowed the EU to compete with larger economies such as the US and Japan. For a while some nations held reserves in Euros as the US dollar fluctuated thanks to massive US deficits. The euro has been the second most widely used reserve currency after the US dollar and between its introduction in 1999 and 2008 the Euro’s share as a reserve currency grew from 17.9% to 26.5%. Recently the US dollar has recovered and is regaining its status and clout as a global reserve currency. Unfortunately some euro zone nations chose to live beyond their means most notable Greece. Investors fear that Greece’s problems will spread to other EU nations such as Portugal, Spain, Ireland and Italy. To maintain the euro’s credibility as a currency EU nations must adhere to monetary regulations designed to maintain a stable euro. Greece’s massive deficits are contrary to euro zone rules and threaten the stability of the euro and have also caused a political rift in the EU.

Greece May Turn to IMF For Aid

Greece is seeking help from the EU but many are speculating that help from the multi nation currency bloc may not be forthcoming. German opposition to EU aid for Greece has pressured the euro in global currency markets. Greek Prime Minister George Papandreou said that severe austerity measures and structural reform demonstrates the Athens government is committed to resolving Greece’s fiscal crisis but high borrowing costs are making it difficult for Greece to meet budget goals. Papandreou stated, “We will make it, provided that our country can borrow on reasonable terms. Based on those conditions, our country is not seeking and will not seek financial aid, either from our European partners or from the IMF, which would be our last resort.”

Merkel Says IMF May be the Only Solution For Greece

Papandreou said that Greece wants a decision to be made at the EU summit next week towards establishing a financial mechanism to aid Greece if needed. Papandreou said an EU decision could reduce borrowing costs for Greece making it unnecessary for the nation to turn to the IMF for help. German opposition to EU aid for the Athens government remains fierce. German Chancellor Angela Merkel told the German Parliament that the IMF may be the only answer to Greece’s problems. Expressing investor concerns Simon Derrick of BNY Mellon Corp. in London stated, “The euro is weakening as investors are questioning whether there really is a plan to support Greece. From an investor’s perspective, do you feel comfortable, in these circumstances, being heavily invested in peripheral Europe?”

Quick Forex Tip: Interbank forex trading determines pricing in all levels of currency markets. Spreads available to interbank traders are sharp and unavailable to outsiders. Interbank traders who can guarantee a large number of transactions for large amounts can demand a smaller spread between the bid and ask price. Unfortunately these same spreads are not available to the average investor making relatively small transactions. Thus, for the average investor to participate in interbank forex trading, s/he must do so through the use of a broker

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