Posted tagged ‘Eurozone’

4th Quarter GDP Better than Expected

March 31, 2010

Tuesday brought some surprising news for economists: fourth quarter growth figures were revised upwards!  Now, it seems the UK economy grew by 0.4% and what is more, this was the final revision.  Having started with a minute 0.1% , we now know that the country exited the recession faster than had been thought!

However according to another survey consumers are still worrying about the economic outlook for the country.  In March, consumer confidence fell somewhat yet the risks of a double-dip or ‘W’ shaped recovery are still not significant.

Some accused media hype surrounding Alistair Darling’s latest Budget announcement as the reason for consumer fears.  Around his announcement, much was made over Britain’s large deficit and the Chancellor’s lack of drastic plans to clear this debt quickly (he currently plans to halve it in four years).

The pound edged up on the good GDP news.


Euro Saved by Greece Bail Package?

March 26, 2010

EU leaders have reached an agreement to help Greece with a package of €22 billion.  The country, with a vast deficit which is eating on the euro currency has, in the past months, been at the centre of EU debates.

While the currency exchange market was speculating on Greece’s future and that of some other Eurozone countries, the euro took enormous pressure.  Indeed, there were even record amounts of euro -selling from international investors, enough to make a few EU leaders call for an end to over-selling and the damage that speculation can do.

Now, Greece will receive a boost to fix its problems, but is it enough?  Currency investors certainly seemed to be mollified by the news as the euro rose by around half a cent on the news against the US dollar and by nearly half a penny against the pound.

Pound Stable…for Now

March 11, 2010

The pound managed to stay flat against the US dollar and the euro in this morning’s trades, as currency exchange traders lost momentum on sterling sell-off.

However, more weakness is forecast for the pound…here are some the reasons why:

Gordon Brown VS David Cameron – no clear winner

The upcoming general election looks set to result in a ‘hung parliament’ – a situation which means no party is a clear winner over the other.

Weak UK Economy

It seems as though fresh data is announced every week, and lately much of it isn’t exactly ideal.  The most recent numbers to cause investors to avoid the pound were those showing worse-than-expected manufacturing output.

Poor Public Finances

Actually, the deficit in the UK isn’t that far off from that of Greece.  Gordon Brown has now called for civil servant pay freezes – but is it enough to stem the problem?

Sarkozy – Public Display of Support for Greece

March 8, 2010

Greece got a boost from French President Nicolas Sarkozy yesterday, after talks between himself and Greek Prime Minster George Papandreou.

So far, EU leaders have been less than enthusiastic about helping Greece in a big bailout package.  Luckily for them, the country does not (so far) need a package, having already announced austerity measures to tackle the massive 12.7% deficit problem.

Mr Sarkozy attacked speculators on the foreign exchange market and on the bonds market, for attacking the euro.  Indeed, in recent months the amount of positions against the euro reached record levels.  However, after the French President’s comments, the currency took a boost and rose against the US dollar.

Are speculators going too far, or are they right to avoid the single currency as Greece – and possibly other EU nations – struggle to tackle their major fiscal problems?

€25 billion for Greece bail Package

February 22, 2010

According to reports from Germany, up to €25 billion will be pooled together by eurozone countries to bail out Greece.  The package, which has caused much uncertainty among markets due to its mysterious and unclear size, is intended to restore stability to the eurozone.

The euro itself has had a tough ride in recent weeks although towards the end of last week it managed to gain around 1% against sterling, after poor UK retail sales figures between December and January were released.  In addition, many currency exchange analysts warned against the euro becoming oversold – not long after, some risk appetite was restored.

Global Stocks Up, Executive Sentiment Up

May 29, 2009

2008 was the year of extremes in the oil market.  In Summer things were soaring, couldn’t stop getting better – the price of a barrel of oil was over $147.

Then September arrived.  The world tumbled down and further down into the downturn, and oil was hit too.  A barrel was worth a mere $30.  OPEC, the main global oil cartel, decided to make production cuts in order to buoy prices.  It worked, and at yesterday’s meeting in Vienna, they decided not to make further cuts – there had been three since September.

Good news then!  If OPEC don’t need to make cuts, and oil is rising steadily then things are beginning to look up aren’t they?

In the Euro‘s 16 nations, things seem to be picking up too.  An index there has shown that executive and consumer confidence is up to a six-month high.  Manufacture is up too and overall global stocks are at a six-month high too.

Calm down though.  We’re still contracting.  Just not quite as much or as fast as before.

Japan Shrinks

May 20, 2009

Japan’s headache shows no signs yet of subsiding.  First quarterly results show that the economy there has shrunk at its fastest pace since 1955.

Exports, consumer spending, company output are all down.  The GDP has shrunk more than expected and by a far greater percentage that other regions – such as the Eurozone and the USA.  Japan shrunk by 15.2 per cent, Eurozone by 2.5 and USA by just 1.6 per cent.  Stark contrasts.

The Prime Minister of Japan, who oft faces strong criticism from opposition parties and from the general public, has said the country needs to take fast action to try and recover the economy.  He plans further fiscal stimulus, and large companies such as Toyota have begun more job cuts and lowering of production levels.

Unsurprisingly, this news will already have affected the foreign exchange market – the biggest liquid global market  -as the confidence levels in Japan decrease.  More will need to be done to lure investors back there.