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FX Day Trading - 4 November 2011
Eeeny meeny miny mo
Will he stay or will he go?
It all depends on George - for now
A multinational crew of six pretend astronauts will emerge from their plywood spaceship today after 74 weeks in a Moscow car park.
They have been part of an experiment to see how isolation would affect members of an expedition to Mars. As they re-enter the real world, the first questions they ask are bound to be about the Greek bailout.
It took place the month before their "departure" and they will be agog to hear how successful it has been. The stress counsellors who have helped them through their 520-day voyage will be on hand to break it gently to the men that not all has gone according to plan in Athens.
The counsellors will have to tread even more carefully when they go on to explain that, as far as they can tell, there isn't even a plan any more.
EU leaders did come up with a new one a couple of weeks ago but the Greek prime minister has scuppered it because he wants to hold a referendum on whether Greece should even be in the single currency. Oh no he doesn't. Oh yes he does. Oh no he doesn't.
Pending the vote of confidence in the Athens parliament this evening, FX spread betting investors continue to demonstrate the saintly patience that has provided the euro with surprising resilience during this latest phase of the crisis.
In the last 24 hours the EUR/USD spread betting market has strengthened by a cent and a half with the EUR/JPY also gaining one yen. Finally, the euro is fractionally better against the pound.
That performance is all the more surprising in view of the interest rate cut delivered by the European Central Bank (ECB) yesterday.
Whilst there had been the possibility of a cut this month most analysts had expected it to come in December, if only to allow the new ECB president, Mario Draghi, to show he was not a wimp on inflation. Following the cut from 1.5% to 1.25%, all investors can be sure of is that he has bigger fish to fry.
With nothing to do today ahead of the confidence vote in Athens, investors will probably tune into a statistic that used to hold compelling interest for them in the old days when Greece was just somewhere to go on holiday; US non-farm payrolls.
The monthly change in the number of Americans with jobs has always been a big deal, providing a timely snapshot of where the US economy was heading a month ago.
In the first nine months of this year a million jobs were added and analysts think another 95k appeared in October. Paradoxically, a number higher than that would be likely to improve confidence and so encourage dollar selling.
But of course the payrolls figure is just the amuse-bouche for the G20 entree and the Athens plat principal. Will the meal end with fromage dur or plaisir des anges? Have a good weekend.
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'EUR/USD Spread Betting Market Rises Despite ECB Rate Cut', Article by Moneycorp, last update: 4-Nov-11
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