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FX Day Trading - 21 October 2011
No breakthrough expected from this weekend's summit
Follow-up meeting planned for Wednesday
So why are we holding our breath?
It has discovered that four-year-old Romanian beggars can apparently make £100k a year in London. Right.
The population of Romania is 22 million, of whom 1.5 million are four years old. If they all took a gap year in Britain's capital they could collectively earn £150bn.
Taxed as high earners at 50% that would leave the kids with enough to buy a house before they began school and the £75bn tax take could be used by the Bank of England to buy twice as many bonds as currently planned, thereby doubling the benefit to the economy.
Panorama does not say whether megabuck begging opportunities in the EU are unique to London. Presumably they do not exist in Romania, for example.
But the scheme might be worth consideration across the Channel. It would provide a handy alternative to the current system, in which cash is extracted from reluctant German taxpayers and thrust upon ungrateful Greek taxpayers.
It would also take some of the pressure off French and German leaders, who are about to break their promise to deliver a solution to the European debt crisis at this weekend's summit meeting. The latest story is that they will announce it next Wednesday.
If only.
It is not clear whether or not financial spread betting investors have swallowed the line that southern Europe's problems will be solved by the middle of next week. There is no reason why they should. It is not as if they haven't heard similar promises a dozen times this year.
But it looks at the moment as though they are maintaining an open mind on the subject. Neither safe-haven yen and dollars nor risky commodity currencies have been in particular demand over the last 24 hours. The prices of gold and oil are virtually unchanged, as are share prices on the major exchanges.
With anticipation of the EU summit and so high on the agenda it is almost pointless to discuss Thursday's economic data or those that will come today. However, for good order's sake we should note that UK retail sales were slightly stronger than expected and consumer confidence slightly softer.
Weekly US jobless claims were close to forecast levels, as were existing home sales. French and German business confidence indicators come out this morning, followed by the UK public sector net borrowing figures for September. At midday Canada releases its CPI inflation numbers and that's the lot.
The likelihood of economic data – or any other logic – driving currency movements today is vanishingly small.
Even though the spread betting market has been warned not to expect any big announcement from the upcoming EU summit, investors cannot help doing exactly that. The weekend will not necessarily end in tears but do go easy on ordering the celebratory drinks. Have a good one.
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The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
'Spread Betting: Demand For Safe Haven Currencies Weakens Ahead of EU Crisis Meeting', Article by Moneycorp, last update: 21-Oct-11
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