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Tag Archives: EU

EURUSD……is the floor reached and rebound imminent?

4H_eurusd

The EURUSD is showing an interesting pattern. Certainly compared to the GBP, it has shown more resilience.  I believe it’s because the EU has less problems and issues compared to the UK.

It seems to be creating a floor at 1.0980.

This week’s european PMIs came out steady and upbeat. I believe all we need is to see more positive growth news coming out of EU and the EURUSD should easily jump back up to 1.1388.

If ADP for the US comes out weak, it may just provide the impetus for the EUR to be bidded upwards, of course, the big move will come tomorrow during the non farm payroll numbers.

It’s looking interesting???!!!

Greece a HOT TOPIC and clearly a disruptive element in the financial markets

I have been asked to give my 2 cents worth about the whole situation of Greece and the EU.

After Euro323Bn worth of financial support to Greece, EU and its member countries, together with ECB and IMF have proven their commitment to the Eurozone, however, this ‘bottomless pit’ cannot continue, as it will cause a financial drain to Euroland.

More importantly, the monies can be better allocated to other EU member countries for economic growth.

We know the debt is not sustainable and it needs to be restructured to include a ‘haircut’ and deferment, otherwise, anything else simply doesn’t work as Greece has no engine of growth.

What are the engines of growth for Greece; shipping, commodities and tourism.  Can these pillars of the economy generate sufficient income for Greece?  Structurally, the problem in Greece is the fact that civil service and pensions ballooned in the past 8 years, sucking the lifeline of the country.  Less and less people are working in the private sector as prospects are so poor, so all flock to become civil servants for the ‘iron rice bowl’.  The wealthy has always escaped taxes and probably will continue to do so.

What is interesting is that post EU in the early years after the millennium, capital and investments poured into Greece and it actually enjoyed prosperity in the early and mid 2000s.  What happened to all that good work?  Where did all the monies go?

Going forward, they are talking about ‘Marshall Plan for Greece’ where E35Billion will be used to rebuild the economy through investments.  The real issue is who is going to drive this?  Will the monies really go into the working wheels of the economy or just into the fat pockets of politicians and bureaucrats?  This is  dangerous proposition, and may well be another delay tactic to postpone the inevitable.

I feel that Tsipras should have a heart to heart discussion with ECB, EU and IMF about how to rebuild the Greek economy; identify engines of growth or potential engines of growth, invest in these potentials, as it will be the income generators for the economy.  Forget about collecting taxes and reducing outrageous pensions, these is only a stop gap measure.

There must truly be sincerity from both parties, not just more politicking.

Action of Confidence by IMF to the Eurozone

It is great news that the IMF has advanced $1Billion on top of the earlier $10Bn by the ECB to Cyprus.

This is a vote of confidence that the IMF, ECB and EU are working together to try and solve the multiple problems in the Eurozone.

However, the real issue is not to keep on printing monies, buying up junk securities and bonds to provide the necessary funds and liquidity.

At the end of the day, the EU, ECB and IMF should try and help these troubled countries in the Eurozone to restructure the monetary policies and fiscal policies so that eventually, job will be created, income will be created, consumption will happen, growth will happen, GDP  will come back.

Unless and until this happens, the Eurozone crisis will continue unabated.