Euro meeting dominates market

13 November, 2012

Graham Harborne

With very little data out yesterday, coupled with Veterans’ Day in the States, markets were guided by the European meeting regarding Greece’s debt crisis and unfortunately although a 2 year extension was put in place there was no resolution and a further meeting has been scheduled for 20th November. Throughout the day there were the usual leaked rumours from the meeting and the euro held up against the dollar and made significant gains against the pound where it moved off the 5 week low it had hit at the end of last week. However once it was confirmed that the meeting had failed to agree final terms for the Greek Banks the euro began to weaken and this has continued throughout the Asian trading session.

This morning we have had a raft of mixed eurozone data and we also have UK inflation data as well as German Business sentiment. In recent weeks we have seen a raft of positive UK data but some analysts fear that the ‘Olympic affect’ may have run its course so don’t be surprised if we see poor data further adding to the pressure the BoE are under to introduce more QE. This however may well be offset when the German ZEW data is released as Germany seems to have stalled in recent months. The largest economy in the eurozone has been growing steadily over the last few years and if they are having a slowdown it really puts into perspective the crisis in the eurozone.

Minor data releases from the States are likely to have little effect and I think this week will be largely dominated by the eurozone debt crisis. Any positive announcements (no matter how farfetched they are) will more than likely boost the euro so do keep in touch with your account manager here at Currency Index to ensure you don’t miss the boat when it comes to getting the rate you want to achieve.