Currency news - Central banks in focus

Central banks in focus - 21-11-07

Markets will, however, need to be on very close alert for central bank actions during this period as well. There has been a gradual increase in rhetoric against a strong Euro from European officials during the current month while confidence in growth prospects has faltered. Euro-Group Chairman Juncker, for example, stated on Tuesday that it is not possible to maintain a benign approach to a strong Euro.

The evidence suggests that the Euro trading above the 1.40 level was of concern to European officials while the 1.50 level was the area where alarm over the situation will increase sharply. Even the US Treasury will start to wonder whether further dollar depreciation will have any net benefit and there must now be real talk within the banks over the need to step in.

The low liquidity levels over the remainder of this week will also increase the probability of success if there is co-ordinated intervention by the global central banks to weaken the Euro. This will be particularly important if the banks can catch a market short of dollars and needing to correct anyway.

Tim Clayton
Investica Ltd
E-mail: tim.clayton@investica.co.uk
+44 (0) 1452 781001

Full list of daily currency analysis

This analysis report is intended for distribution to ACM Advanced Currency Markets SA private, corporate customers and members. Information contained in this report is based on data obtained from sources considered to be reliable, however, no guarantees be made by ACM Advanced Currency Markets SA as to the accuracy, timeliness and completeness of the data. The opinions and forecasts contained herein are subject to change without notice and ACM Advanced Currency Markets SA accepts no liability for any losses, damages and/or expenses incurred arising from or in any way connected with the utilisation of all or part of this report. This report is meant for information purposes and is not intended to be and should not be construed as an offer or solicitation to buy, sell foreign exchange or indeed any other financial instruments. This report, or any part of it may not be reproduced or distributed without the prior consent of ACM Advanced Currency Markets SA.