As one crisis appears to be averted, another one makes headlines. In case you are wondering I’m talking about Greece and the U.S fiscal cliff.
On Monday it was announced that European Finance Ministers had eased terms on Greece’s emergency aid, and that 3 years of crisis had reached an agreeable end. Greece can embark on a journey of recovery as rates on bailout funds have been cut, along with suspension on interest payments for the next 10 years clearing the way for Greece to receive its next tranche of aid in December.
However, the Euro and other risk currencies were not given any time to build on the good news as reports that the discussions over the fiscal cliff were “disappointing”. The U.S economy, in fact, global economy is at risk should the U.S government fail to agree on terms that will avert the fiscal cliff. The potential expiration of the ‘Bush’ tax cuts amongst other initiative threatens to drag the U.S economy back into a period of slowed growth and recession.
As a result we have seen the safe havens of the U.S dollar and Japanese Yen claw back some of the losses they experienced as progress was made in Europe. So far EUR/USD found tough resistance at the 1.3000 handle, but looks to be a neutral bet from a medium term perspective. The longer term trend remains bearish, but the short covering in the build-up to Monday’s Euro group meeting has made the outlook a little less clear.
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Just When We Thought It Was Safe To Go Back In The Water...
Published 12/13/2012, 01:09 AM
Updated 07/09/2023, 06:31 AM
Just When We Thought It Was Safe To Go Back In The Water...
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