[Archive] FOREX - Trends, Forecasts and Consequences (Episode 9: November 2011) - page 100
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
How about a long-term forecast of 1.25 will it be?
In all seriousness, I don't think it will.
)))))))))))))))))))))))))))))))))))))
In all seriousness, I don't think it will.
With 1.25 the question is already solved - positively!, but the correction from it will be good!
How about a long-term forecast of 1.25 will it be?
Wouldn't be surprised if it's 1.6 in the near future
Only euronews broadcast some interesting news today:
1. eurozone bond liquidity has reached approx. 250 billion euriks
2. A Chinese rating agency has given Greece the status of being totally insolvent. This means that China, where Europeans have looked in hope, will definitely not purchase any Greek bonds.
3. Yields on Italian bonds have exceeded the 7% "default" bar
4. Yields on Spanish bonds have doubled from the previous issue. The new Spanish government has told the EU that it can no longer service its debt on its own in the current situation, i.e., it must either default or give money. Merkel was called and demanded money.
5. Germany has faced the fact that they could not get even half of the required amount when they tried to float 10-year bonds. The yield on the bonds also went up. That means that they do not lend money to insolvent Greeks, but to Germans who seem to be solvent.
In other words, this means that the eurozone countries no longer have any money to borrow, at least by issuing additional notes. Negotiations with China regarding a USD 100 billion tranche failed.
Therefore, there is no more demand for notes, but more than for euros. Because the European Union now faces a pressing question: where to get the euro? Debts have to be paid, salaries have to be paid too, budgets are in deficit, not a penny is flowing into the real economy, everything has gone to the left, i.e. to save the banking system and "saving" these very banking corpses is still going on (for example, today the big European banks are banned from lending to foreigners, i.e. outside the territorial borders of the country where the bank or its branches operate).
I wouldn't be surprised if there is a 1.6 in the near future
Wouldn't be surprised if it's 1.6 in the near future
Only euronews broadcast some interesting news today:
1. eurozone bond liquidity has reached approx. 250 billion euriks
2. A Chinese rating agency has given Greece the status of being totally insolvent. This means that China, where Europeans have looked in hope, will definitely not purchase any Greek bonds.
3. Yields on Italian bonds have exceeded the 7% "default" bar
4. Yields on Spanish bonds have doubled from the previous issue. The new Spanish government has told the EU that it can no longer service its debt on its own in the current situation, i.e. either give the money or default. Merkel was called and demanded money.
5. Germany has faced the fact that they could not get even half of the required amount when they tried to float 10-year bonds. The yield on the bonds also went up. That means that they do not lend money to insolvent Greeks, but to Germans who seem to be solvent.
In other words, this means that the eurozone countries no longer have any money to borrow, at least by issuing additional notes. Negotiations with China regarding a USD 100 billion tranche failed.
Therefore, there is no more demand for notes, but more than for euros. Because the European Union now faces a pressing question: where to get the euro? Debts have to be paid, salaries have to be paid too, budgets are in deficit, not a penny comes to the real economy, everything has gone left, i.e. to save the banking system and "saving" these very banking corpses is still going on (for example, today major European banks are forbidden to give loans to foreigners, i.e. outside the territorial borders of the country where the bank or its branches operate).
So 1.16 where does 1.6 come from?
So 1.16, where does 1.6 come from?
Yeah, all banks will sell euros and buy dollars and use them to pay salaries, pensions, benefits to non-working guests and to plug holes in budgets which are denominated in euros. OK.
There's another hitch here. European banks do not have euros to sell. Interbank exchange is not a speculative operation on a cent deposit, you can go long or short and even with a leverage. Within two banks the contracts need to be settled. They have nothing to pay, i.e. nothing to sell. European banks have bonds of debtor-countries and as the bonds are being repaid, the banks receive currency from the debtors. But there's a hitch, too, as liquidity on the bonds is already close to zero. That is, if earlier the debtors increased an emission of each new one and they had enough to pay off the former debts and still had something left for the budgetary expenses, then today the shop is closed, if not to say that it is sloped under the carpet.
Euro is only in banks of countries supplying goods to the European Union and in their currency reserves, i.e. Russia and China and some others. But fools are not likely to be found amongst those countries to rush out and sell Euros when demand for that very currency is rising. Everyone is trying to get rid of European bonds. Only those who need that very currency to pay for something urgently get rid of it.
It is understandable that the Eurozone countries benefit from the depreciation of their currency because all of their debts are denominated in European currencies. But the trouble for them is that speculators and other holders of their bonds think very differently. So they have to face the same problem as in Japan when the economy is in the toilet and the currency is growing.
There's another hitch here. European banks do not have euros to sell. Interbank exchange is not a speculative operation on a cent deposit, you can go long or short and even with a leverage. The contracts must be settled within two banks. But they have nothing to pay, i.e. nothing to sell. European banks have bonds of debtor-countries and as the bonds are being repaid, the banks receive currency from the debtors. But there's a hitch, too, as liquidity on the bonds is already close to zero. That is, if earlier the debtors increased an emission of each new one and they had enough to pay off the former debts and still had something left for the budgetary expenses, then today the shop is closed, if not to say that it is sloped under the carpet.
Euro is only in banks of countries supplying goods to the European Union and in their currency reserves, i.e. Russia and China and some others. But fools are not likely to be found amongst those countries to rush out and sell Euros when demand for that very currency is rising. Everyone is trying to get rid of European bonds. Only those who need that very currency to pay for something urgently get rid of it.