Decision day is looming for those involved in the Greek bailout. European Commission, European Central Bank and International Monetary Fund officials are all meeting later today to review the progress being made by Greece in its attempt to cut levels of debt. Being totally up front with you I could have copied and pasted a weeks worth of headline articles because each day we appear to be ‘getting closer’. It would not surprise me one bit if we are in the same position this time next week. However, my rant aside we are expecting Germany, the main powerhouse behind the euro to case their vote tomorrow.
Pound Sterling – UK Markets
UK retail sales saw their worst performance for 16 months in September according to the latest Distributive Trades Survey. They found that 24 percent of retailers said sales were higher than the same month last year, compared with 39 percent who reported a fall. This imbalance gave the UK its weakest measure since May 2010 but was in line with expectations. Therefore, there was little effect on sterling which remains relatively stable.
US Dollar – US Markets
President Barack Obama’s latest $447 billion jobs plan appears to have gone down well with economists worldwide. The majority state that the move will help avoid a return to recession by maintaining growth and pushing down the unemployment rate next year. The plan involves cutting the payroll taxes paid by workers and small businesses while extending unemployment insurance. With current unemployment levels soaring and growth near stagnant it baffles me how they believe this simple move will pull them out of what is a dire situation.
The Dollar itself continues to retrace gains made last week as economic data floods the market. Furthermore, with the eurozone debt crisis supposedly nearing a short term conclusion, investors continue to come out of hiding and restore some confidence on the continent.
Euro – European Markets
On the eve of what will be a crucial day for Greece and the eurozone, George Papandreou has said it is very important his country gets indications of support from European partners. He also made a point of blaming the recession on recent stutters in debt repayments, but came clear of that stating that the ultimate goal remains the same. The one saving grace for Greece is that they now appear to have the backing of Germany, who remains a clear front runner in the eurozone recovery. The euro itself continues to defy the odds, clawing back ground against sterling and the US Dollar ahead of tomorrows announcement.
Other Currencies – Highlights
The Thai Baht could potentially fall 3.6 percent by the end of the year after the currency surpassed key technical levels set by traders according to economists. If predictions are proven correct the baht will have fallen to its weakest level since August 2010.
Sterling Rises on Hopes of EU Softening Tone on Backstop