IMF fund raising plans lift Euro | <b>Online Forex Trading</b> - Currency <b>...</b>

News that the IMF plan to raise $600 Billion gave the Euro a lift off the lows yesterday taking it up to a high of EUR/USD 1.2880. It is intended to lift the fire power to $ 1 trillion and markets liked it. It seems the Likes of China Brazil India and Oil producing countries will be asked to step up to the plate. However, it remains to be seen with the US apparently not prepared to contribute as they rightly feel that Europe has enough resources to manage on its own. Euro zone bond markets continue to perform a smidge better so all in all the Euro short squeeze could continue. Greece will edge into the spotlight as negotiations continue. Success seems likely despite the consensus view that it will not be enough and the whole circus will have to start again some time in the future when Greece fails to make progress. EUR/USD 1.30 seems more likely than not but I still wouldn’t want to get caught long. Headlines IMF targets raising of $600 BillonMonti forecasts 5% budget surplus for 2013, provided rates fall. In your dreams MontiGreece threatens bond holdouts with new laws. Change the rules if its not going your wayEuropean banks continue to support local bond markets while ECB still seen buyingEUR/USD sees good two way orders As equity and peripheral bond markets continued to hold up the Euro edged up and the US dollar slipped a little. EUR/USD stuck its head over 1.2800 briefly this morning but trades back at 1.27400 on news that ratings agency Fitch is pondering a 2 notch downgrade for Italy. As we have said the recent ratings cuts by Moody’s hold more implication for Italy and Spain than France.Later today or tomorrow the discussions on Greek debt will resume. While some are pointing the finger at hedge funds it seems the banks also may not back down. I would expect Greece to buckle and agree higher rates. When you are desperate for cash you sign up for anything but of course it will not be sustainable. These talks remain crucial to markets and I am edging towards expecting an agreement which could see the Euro higher short term. Longer term there seems nothing on the horizon to change a bearish view Headlines. ECB continues to support Italian and Spanish bonds. The ECB is quietly lending support to these markets in an attempt to edge yields lower but without excessive buyingWorld Bank slashes world growth forecast. Outlook grim. The world Bank lowered growth estimates to 2.5% for 2012 from 3.6% and sees a real risk that escalation of the euro zone crisis could plunge global economies into a slump.Moody’s upgrades Indonesia to Investment grade. Now which part of the world are they Greece will fail because the Turkeys ( no pun intended) in charge cant vote for an early Christmas Thanks to German magazine Der Spiegel I was looking at some startling facts about Greece. Greece is in 90th place in terms of competitiveness in a list of 142 countries (just behind Lebanon, Georgia and Algeria). Not bad, could be worse you might say. Well that is until you find out that Germany is in 6 th place. The idea that 2 countries that far apart would share the same currency is crazy……….but they do Remember all those reforms we heard about from Greece. That they would adhere to the cutbacks in the civil service as part of the enforced programme from the European Union, International Monetary Fund and European Central Bank, the Troika as they are known. Well this is the status of the administrative reforms Some 150,000 public-sector jobs are supposed to be eliminated by 2015, with 30,000 originally slated for elimination in 2011. In reality, 6,000 civil servants and other employees have lost their jobs. Mostly,they are people who would have gone into retirement anyway. It beggars belief but most reforms and the sale of state assets are equally well behind the curve. I am not sure we owe Greece any more sympathy and frankly we shouldn’t give them any more money but they probably will. Well as I said at the weekend don’t chase the Euro down on Standard & Poor’s downgrades and here we are back up at 1.2755.It was an event that was heavily discounted and that is what forex trading is about. Some other things have helped one of them being Chinese data which was muted to be worse than expected and turned out better. There is still scope for more upside if shorts get squeezed out but I do not have any great view on where a good level might be at the moment.We still believe in holding a core short position and would add to that at some stage. This week the Greek rescheduling talks hold centre stage and will likely determine the next decent move. Headlines After hitting 17 month low Euro recovers to EUR/USD 1.2760Chinese GDP data comes in above expectations at 8.9% year on yearItaly’s Monti calls for more help from Germany and on interest rates. What about some proper reform first MontiECB´s Draghi. ¨Europe in a very grave situation¨……… well spottedGreek debt talks stalled on interest rates. The talks will resume this week. Banks are asking for much higher interest rates on new bonds although hedge fund holders may yet derail the whole thing. Remains a crucial factor in short term fortunes of the Euro so needs to be watched.Italians lose faith in the Euro. According to poles 55% of Italians have lost confidence in the Euro while a third would prefer a return to the Lire. That was when everyone was a millionaireEuropean car sales fell in December.(Western Europe down 4.3% in December down 5% full year) BUT Germanys car sales rose 6%, 8.8% for the year. Fiat of Italy saw the biggest drop in December…………There may be trouble ahead as the song goes. More divergence of courseEFSF ( European finance and development fund) downgraded by S & P to AA+ in line with France. It was not exactly an investors favourite when AAA but no real change for demand I suspect For Euro shorts we may have to wait until economic data in Southern Mediterranean countries provides evidence of recession and I include France in that. Those countries have all agreed austerity measures but none have even begun to touch on the real problem of labour market reforms News that the IMF plan to raise $600 Billion gave the Euro a lift off the lows yesterday taking it up to a high of EUR/USD 1.2880. It is intended to lift the fire power to $ 1 trillion and markets liked it. It seems the Likes of China Brazil India and Oil producing countries will be asked to step up to the plate. However, it remains to be seen with the US apparently not prepared to contribute as they rightly feel that Europe has enough resources to manage on its own. Euro zone bond markets continue to perform a smidge better so all in all the Euro short squeeze could continue. Greece will edge into the spotlight as negotiations continue. Success seems likely despite the consensus view that it will not be enough and the whole circus will have to start again some time in the future when Greece fails to make progress. EUR/USD 1.30 seems more likely than not but I still wouldn’t want to get caught long. Headlines IMF targets raising of $600 BillonMonti forecasts 5% budget surplus for 2013, provided rates fall. In your dreams MontiGreece threatens bond holdouts with new laws. Change the rules if its not going your wayEuropean banks continue to support local bond markets while ECB still seen buyingEUR/USD sees good two way orders Online forex Trading