238 lines
6.8 KiB
Plaintext
Executable File
238 lines
6.8 KiB
Plaintext
Executable File
finance
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currency
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8374651
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-----
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# Euro crisis is far from over - what the experts are saying
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## Moody's cut Spain's debt rating on Thursday, pushing the euro lower and
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deepening the sense of crisis in the currency bloc on the eve of a crucial
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summit.
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![Euro crisis is far from over - what the experts are saying][1]
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Euro crisis is far from over - what the experts are saying Photo: Larry Lilac
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/ Alamy
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6:00AM GMT 11 Mar 2011
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[Comments][2]
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The euro hit an intraday low against the dollar of $1.3791 and traders warned
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it could fall further in coming days due to market concerns that Friday's
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17-nation meeting and a summit of the full 27-nation European Union on March
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24-25 may fail to agree on decisive action to tackle the debt crisis.
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"If officials make no progress and Germans remain unwavering in their demands,
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the likelihood of a capitulation (in the euro) will be significantly higher,"
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said **Jessica Hoversen, currency strategist at MF Global in Chicago**.
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She said that hawkish rhetoric from the European Central Bank was adding to
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investor concern. "The ECB's disregard for economic variances may be the
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tragic flaw that drags the currency lower," she said, adding that the
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compromise of $1.3862, the February 2011 high, opened downside potential.
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"The euro seems to be under pressure given the downgrade from Moody's," **Mary
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Nicola, a currency strategist at BNP Paribas SA in New York** told Bloomberg.
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"Weaker-than-expected trade data out of China and Germany, all of those are
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putting pressure on the euro."
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The euro may decline to as low as $1.3538, **Karen Jones, head of fixed-
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income, commodity and currency technical analysis at Commerzbank in London**,
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told Bloomberg. "A break below support at the 20-day moving average at $1.3752
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targets a move down toward $1.3538, the 55-day moving average," she said.
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## Related Articles
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* [Spain downgrade sparks storm over ratings][3]
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10 Mar 2011
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* [Moody's downgrades Spain][4]
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10 Mar 2011
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* [EU paralysis drives fresh bond rout][5]
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09 Mar 2011
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**BNP Paribas **said in a note that it expects euro/dollar to test the major
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up trend line support at the $1.3775 level. "This has been in place since the
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beginning of the year and is very significant," it said. A break below it
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would signal a larger correction of recent gains targeting $1.3710. The bank
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said it continues to view any euro/dollar pullback as a correction of the
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gains seen since the beginning of the year. BNP has raised its medium-term
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euro/dollar forecast to $1.46.
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**Camilla Sutton, chief currency strategist at Scotia Capital in Toronto**,
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said the near-term technical picture is in the midst of turning negative for
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the euro. "Since the market has built up significant long positions, EUR is
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vulnerable to profit taking. With today's decisive break below 1.3860, we
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expect further near-term downside and expect a near-term test down to the
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50-day moving average of 1.3575 is reasonable." Their medium-term bullish euro
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outlook, however, has not changed.
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**London-based UBS FX analyst Geoffrey Yu **said the Spanish downgrade showed
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the euro zone's debt crisis is far from over. He said risks also stem from
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Europe's inability so far to agree on a framework for a debt rescue fund.
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Financial markets are also concerned about the growing risk that Greece and
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Ireland may have to restructure their debts despite EU/IMF bailouts which have
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only bought time. Greek 10-year bond yields rose to a post-crisis high above
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12.8pc and two-year yields have risen sharply.
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"There appears to be a growing risk that Greece could struggle to meet its
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financing needs before too long," **Capital Economics** said in a research
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note. "We think that the markets' increasingly gloomy stance is justified."
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However, **Greg Anderson, a currency strategist at Citigroup in New York**,
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remained more upbeat. "It's a broader risk-off move. It's a reversal of what
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had rallied the most," he told Bloomberg. "The euro is outperforming the
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Aussie, Swedish krona and Norwegian krone."
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[What are these?][7]
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* Share: [Share][6] [ ][8] [ ][9]
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[Tweet][10]
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http://www.telegraph.co.uk/finance/currency/8374651/Euro-crisis-is-far-from-
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over-what-the-experts-are-saying.html
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Telegraph
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## [Currency][11]
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* ### [Europe »][12]
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* ### [Finance »][13]
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* ### [Economics »][14]
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* ### [Business Latest News »][15]
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* ### [EU »][16]
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Related Partners
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* [Save money on your international currency transfers][17]
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In finance
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[![][18] ][19]
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### [Japan prompts first joint currency intervention since 2000][19]
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[![The yen briefly hit record highs against the dollar on Thursday as quake-
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hit Japan's nuclear crisis unleashed a global risk sell-off and talk of
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intervention by the Bank of Japan and the G7. This is how analysts explained
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the spike in the yen.][20] ][21]
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### [Why the Japanese yen has jumped][21]
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[![Euro crisis is far from over - what the experts are saying][22] ][23]
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### [Euro crisis is far from over][23]
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[X][6] Share & bookmark
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[What are these?][7]
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Share:
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* [ ][6]
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* [ ][8]
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* [ ][9]
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* [Tweet][10]
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* Advertisement
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![][24]
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telegraphuk
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Please enable JavaScript to view the [comments powered by Disqus.][25] [blog
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comments powered by Disqus][26]
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## [Today's Sterling Prices »][27]
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