Greece, which needs to borrow or refinance €53 billion in 2010, has turned to Germany in particular and the European Union in general to ask for a clear message that they back Athens’s austerity measures. Greek Deputy Foreign Minister Dimitris Droutsas Thursday morning 4 March asked for the support in order to help Greek financial markets, to allow the country to borrow more cheaply. Wednesday, US and EU regulatory officials said they were examining trading in the euro, as a result of the Greek financial crisis impact on the euro currency market.
Links to other sites: Financial Times, Reuters
The US Federal Reserve said Wednesday 16 December that the US economy is improving, and in the hours that followed the US dollar gained against most other major currencies. It was up 0.9 percent against the euro, a three-month high. The Fed said it wants to keep interest rates “extremely low” but that figures on jobs and consumer spending are showing positive signs.
Links to other sites: Bloomberg, Financial Times, Time Magazine
Zurich, Switzerland (GenevaLunch) – The US dollar continued its slide in world currency markets, pushing the price of gold higher. It reached near parity with the Swiss franc, at 1.0048, in trading Monday 16 November, and was virtually at 1.50 euros: 1.4960. Gold rose to $1,132.95 although it later slipped slightly.
Links to other sites: Bloomberg, Financial Times
European economic leaders have called for “discipline” in currency markets as the US dollar continues its slide against the Euro, contributing to pricier gold and more expensive oil. European Central Bank head Jean-Claude Trichet said that “excessive volatility was bad for economic development”. The Euro has gained 20 percent against the dollar since earlier this year, which threatens to undermine Europe’s economic recovery, by making its exports more expensive.
Oil is trading at $80 a barrel in New York, reflecting increased optimism about the state of the world economy, but also the weak dollar, and moved sharply beyond its $65 – 75 per barrel trading range it has maintained since July. Gold stayed above $1060 an ounce in trading 20 October and looks set to set new record prices, also on a weaker dollar, traders say. Bloomberg, Reuters, Wall Street Journal
We're all connected: Swiss economic health depends on the world, says SNB
Zurich, Switzerland (GenevaLUnch) - The Swiss National Bank’s (SNB) is guardedly more optimistic than in June about the outlook for the Swiss economy, it said Thursday afternoon 17 September in its quarterly report, but monetary policy will remain loose in order to stimulate the economy. The central bank revised its GDP (gross domestic product) forecast, saying it expects this to fall by between 1.5 and 2 percent, less steeply than forecast in June (2.5 to 3 percent). The key interest rate range remains unchanged at 0.0-0.75, “still aiming to keep the Libor within the lower end of this range, that is, at approximately 0.25%.” The Libor serves as an indicator of shifts in bank lending rates.
The SNB says it will continue to intervene in currency markets to keep the Swiss franc competitive internationally.
Bern, Switzerland (GenevaLunch) – The Swiss central bank (SNB) will maintain the monetary policy it introduced in March, it announced today 18 June. Its predictions for the Swiss economy continue to be guardedly pessimistic, because of the negative effects the world economy has on Switzerland. The one positive note has been the decline in the prices of commodities, such as oil, but this has contributed to deflation. Swiss prices will decline by 0.5 percent in 2009, says the Swiss state secretariat for economic affairs (SECO) in its report yesterday 17 June.
The world economic outlook Thursday morning was not bright, with the Britain reporting that unemployment rose from 5.4% in the second quarter of 20008 to 5.8% in Q3 (CNN, Times UK) and is likely to go higher, and Asian stocks falling lower as markets there begin to accept that a recession is underway (Reuters). In the US, Treasury Secretary Henry Paulson changed course and announced that government bailout money will be used to boost consumer spending (Bloomberg). The pound fell to a new low against the euro of £0.8356 and a six-year low against the dollar, at 1.49. (Financial Times). Meanwhile, Germany, Europe’s largest economy, officially entered a recession, according to Bloomberg.
Stock markets throughout Asia fell Thursday amid growing fears over exports and recession, while the dollar rose to a two-year high against the euro. Reuters
The European Commission Wednesday reduced its growth forecast for the European Union to 1.4% (1.3% for the euro area), down about a half point from its forecast in April, saying that growth is “expected to slow down sharply and inflation is set to remain higher than usual for some time.” The area will escape recession, but just, it added. The EC cited high commodity prices, housing market “corrections” and a global slowdown in growth as factors.
