Currency watch: The euro fights back

It all seems to be coming together for the euro again this week with further bullish noises from the periphery propelling the single currency back from the brink.

Standard & Poor’s released a note stating that Ireland will be able to fund itself through 2012 via the debt markets and not receive any further help, while rumours still swirl over the funding of Greece with a deal looking likely.

This has been attributed to the European Central Bank reportedly backing down on its opposition to a rescheduling of Greek debt. A German newspaper did report on Tuesday however that "it is now considered certain that the IMF will not pay its share of the fifth tranche of aid to Greece at the end of June" as a result of there being no detailed funding plan in place.
 
The single currency is also finding its feet after a real bad run of data from the US, where consumer confidence fell to a six-month low of 60.8 on Tuesday, which was well below the estimated move higher and shows that killing a terrorist can’t solidify consumer confidence.

In fact there were few bright spots in the report which showed that both the expectations and present situation measures fell, while consumers’ views of employment, business conditions and income also tumbled.

More poor data was forthcoming from the Case-Shiller House Price Index that showed housing prices and price-to-rent ratios have regressed to 1999 levels and that the outlook is for further losses over the course of the year.

To complete the trifecta of bad news, Chicago PMI fell to 56.6; the sharpest fall since October 2008.

So feel free to chuck that information at all those doom-mongers saying that the UK is doing so much worse than elsewhere. Hard times are continuing for all.
 
Jeremy Cook, chief economist at World First foreign exchange, 03.06.2011