Currency markets and confidence in economic recovery
Gulf Economic Times Tuesday, August 17, 2010 7:04
Shaken confidence in the recovery of the developed world as well as in the wider global economy during the first half of, 2010, when financial markets were closed the halfway point to 2010, was the performance of most asset levels lower than the consensus forecast issued at the beginning of the year significantly. Weakened stocks around the world in both developed and developing markets, and I felt at the request of U.S. treasury bonds to secure a strong crops are much lower than the lowest rates in 2009 in a report two years.
Enjoyed a fixed income markets in general shares the same external performance over the first six months, while weakened commodity markets widely. Gold was the outstanding performance so far this year, reaching an unprecedented high of 90 .1,264 dollars an ounce in mid-June, indicating that a strong risk factor to avoid is still deployed in the markets after the crisis today. While in the cast worries about economic growth weigh on global stocks and increased demand for gold safe.
So far, the dominant idea in the financial markets during the past six months was the debt crisis in Europe. He was pushed a side effect of the debt crisis the European to the European Central Bank to pay to walk in the path of revival of the Anglo-Saxon market, has been pumping a lot of capital to support banks and governments, which is underdeveloped in funding. And managed to peripheral European countries like Portugal, Greece, Ireland and Spain to find the appropriate funding since the advent of excellent subject of religion, but in return for increased reliance on the European Central Bank to get capital. In July, the European economies are able to find some comfort after passing a large European banks to test the controversial tension with about 5.3 billion euros of capital required to ensure the seven institutions limit. This allowed the euro to recover at least in the short term and return to compete with the U.S. dollar, marking a rise worth 1.6 percent against the greenback during the month of July.
However, market participants were not convinced and raised serious questions about the depth and reliability tests. The major concern for debt exclusion campaign to provide excellent balance sheets, considering only the evaluation of potential losses on government bonds that are traded more than those that are held to maturity.
And design experts on the euro and a funding crisis in the euro area, and that carrying the debt faced by many European countries much larger than the cuts in the budget for the desperate calm. May be in this thing from the truth during this half of the year in the event of non-application of the proposed financial austerity measures effectively.
Helped the massive liquidity and government support measures taken by the majority of the Group of Twenty in the last twelve months to raise the confidence and stimulate business and trade. However, the actual fact is that the near-term perspective has become more pronounced with the support of governments and central banks, while the perspective how far has become more ambiguous. This is due to the inevitable problems that will appear when the central banks decide that the large reduction conditions to obtain liquidity and deliberate on governments to reduce the bloated budget deficits. And have already begun to see the financial basis of the amendments in the United States and the United Kingdom and the countries of Europe Home is sure to follow the other regions the same, if only to hide from jobseekers weakness following.
We expect that during the next six months, in terms of currency, commodity-linked currencies will weaken to the point. The Swiss franc and the Japanese yen and the pound sterling the best performers in the major currencies during the second quarter and the euro rose against the Australian dollar and Canadian away from the exchange of periodic, such as the Australian dollar, Canadian dollar and the New Zealand dollar to the U.S. dollar, has reduced the Japanese yen and Swiss franc in case the application of austerities financial , not just announced in the case of Bank of China allowed pboc popular appreciation of the yuan against the dollar.
And enjoy the emerging markets currencies, such as Brazil and India well positioned to benefit from the influx of foreign capital over the next twelve years because of growing concerns about inflation and increasing growth. Interested in monetary policy in emerging markets, the subject of inflation over the imbalance in the balance or funding problems at local banks, which suggests the existence of vast differences between the fast-growing countries in Asia and the developed world.
As America is still reeling in fear about the stagnant growth during the summer of 2010 and specifically the employment sector and unemployment, which remains a key challenge for the administration of President Barack Obama on the grounds that most of the executives is no blame after the necessity of starting employment, leaving the market with a mixture of viewers lateral and investors unwilling to take risks and allowed the Japanese yen against the yen and the yuan to move forward. As for the GCC countries, the debt crisis of the euro area have had their effects on the single currency project, which began in 1990. As it is in December / December 2001 agreed the GCC countries to adopt a new economic agreement, including a single currency for the GCC countries, which was an act in progress. It is clear that the problems that have emerged from Europe is just a reminder that economic fundamentals can not be concealed or ignored in the long term. A Gulf Cooperation Council (GCC) to avoid falling into the same mistake by not neglecting the economic criteria, which include: inflation, interest rates and central bank reserves of foreign currency and the budget deficit and public debt. It has been the biggest mistake that occurred when the European Union is the adoption of a common monetary policy without a common fiscal policy are complementary. And the creation of the GCC single currency to a strong competition in the arena of world currencies, Faalantalaq of economic and accounting standards must be uniform, and to build a solid foundation and avoid the pitfalls that beset Europe and the rest of the world.
Gulf Economic Times Tuesday, August 17, 2010 7:04
Shaken confidence in the recovery of the developed world as well as in the wider global economy during the first half of, 2010, when financial markets were closed the halfway point to 2010, was the performance of most asset levels lower than the consensus forecast issued at the beginning of the year significantly. Weakened stocks around the world in both developed and developing markets, and I felt at the request of U.S. treasury bonds to secure a strong crops are much lower than the lowest rates in 2009 in a report two years.
Enjoyed a fixed income markets in general shares the same external performance over the first six months, while weakened commodity markets widely. Gold was the outstanding performance so far this year, reaching an unprecedented high of 90 .1,264 dollars an ounce in mid-June, indicating that a strong risk factor to avoid is still deployed in the markets after the crisis today. While in the cast worries about economic growth weigh on global stocks and increased demand for gold safe.
So far, the dominant idea in the financial markets during the past six months was the debt crisis in Europe. He was pushed a side effect of the debt crisis the European to the European Central Bank to pay to walk in the path of revival of the Anglo-Saxon market, has been pumping a lot of capital to support banks and governments, which is underdeveloped in funding. And managed to peripheral European countries like Portugal, Greece, Ireland and Spain to find the appropriate funding since the advent of excellent subject of religion, but in return for increased reliance on the European Central Bank to get capital. In July, the European economies are able to find some comfort after passing a large European banks to test the controversial tension with about 5.3 billion euros of capital required to ensure the seven institutions limit. This allowed the euro to recover at least in the short term and return to compete with the U.S. dollar, marking a rise worth 1.6 percent against the greenback during the month of July.
However, market participants were not convinced and raised serious questions about the depth and reliability tests. The major concern for debt exclusion campaign to provide excellent balance sheets, considering only the evaluation of potential losses on government bonds that are traded more than those that are held to maturity.
And design experts on the euro and a funding crisis in the euro area, and that carrying the debt faced by many European countries much larger than the cuts in the budget for the desperate calm. May be in this thing from the truth during this half of the year in the event of non-application of the proposed financial austerity measures effectively.
Helped the massive liquidity and government support measures taken by the majority of the Group of Twenty in the last twelve months to raise the confidence and stimulate business and trade. However, the actual fact is that the near-term perspective has become more pronounced with the support of governments and central banks, while the perspective how far has become more ambiguous. This is due to the inevitable problems that will appear when the central banks decide that the large reduction conditions to obtain liquidity and deliberate on governments to reduce the bloated budget deficits. And have already begun to see the financial basis of the amendments in the United States and the United Kingdom and the countries of Europe Home is sure to follow the other regions the same, if only to hide from jobseekers weakness following.
We expect that during the next six months, in terms of currency, commodity-linked currencies will weaken to the point. The Swiss franc and the Japanese yen and the pound sterling the best performers in the major currencies during the second quarter and the euro rose against the Australian dollar and Canadian away from the exchange of periodic, such as the Australian dollar, Canadian dollar and the New Zealand dollar to the U.S. dollar, has reduced the Japanese yen and Swiss franc in case the application of austerities financial , not just announced in the case of Bank of China allowed pboc popular appreciation of the yuan against the dollar.
And enjoy the emerging markets currencies, such as Brazil and India well positioned to benefit from the influx of foreign capital over the next twelve years because of growing concerns about inflation and increasing growth. Interested in monetary policy in emerging markets, the subject of inflation over the imbalance in the balance or funding problems at local banks, which suggests the existence of vast differences between the fast-growing countries in Asia and the developed world.
As America is still reeling in fear about the stagnant growth during the summer of 2010 and specifically the employment sector and unemployment, which remains a key challenge for the administration of President Barack Obama on the grounds that most of the executives is no blame after the necessity of starting employment, leaving the market with a mixture of viewers lateral and investors unwilling to take risks and allowed the Japanese yen against the yen and the yuan to move forward. As for the GCC countries, the debt crisis of the euro area have had their effects on the single currency project, which began in 1990. As it is in December / December 2001 agreed the GCC countries to adopt a new economic agreement, including a single currency for the GCC countries, which was an act in progress. It is clear that the problems that have emerged from Europe is just a reminder that economic fundamentals can not be concealed or ignored in the long term. A Gulf Cooperation Council (GCC) to avoid falling into the same mistake by not neglecting the economic criteria, which include: inflation, interest rates and central bank reserves of foreign currency and the budget deficit and public debt. It has been the biggest mistake that occurred when the European Union is the adoption of a common monetary policy without a common fiscal policy are complementary. And the creation of the GCC single currency to a strong competition in the arena of world currencies, Faalantalaq of economic and accounting standards must be uniform, and to build a solid foundation and avoid the pitfalls that beset Europe and the rest of the world.
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