User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Friday October 17, 2008 - 13:35:14 GMT
BHF-Bank -

Share This Story:
| | Email

FX Briefing - Rescue packages only boost euro temporarily

FX Briefing 17 October 2008


·        Stabilisation packages reduce worries over financial markets

·        Focus now on global recession fears

·        EMU has more leeway to cut interest rates than USA


Rescue packages only boost euro temporarily

EUR-USD began the week on a firmer footing, peaking at 1.377 on Tuesday – about 3 cents higher than at the end of the previous week. On Sunday, leaders of the eurozone countries agreed in principle on a stabilisation plan for the financial system, and on Monday, Germany and France unveiled the national details. Thanks to these rescue packages and additional measures taken by the central banks to provide liquidity, there now seems to be less likelihood of individual institutions collapsing and thus endangering the financial system as a whole.


Equity markets in particular heaved a sigh of relief, clawing back most of the previous week’s

losses by Tuesday. However, towards the middle of the week the euphoria faded and share prices plummeted again because government rescue schemes cannot stop the global economic downswing. Therefore, an impending global recession has now become the prime concern. During the latter half of the week, EUR-USD dropped below 1.34 at times. The euro has not been lower since June 2007, before the subprime crisis broke out.


Governments all over the world are offering guarantees and providing capital in an attempt to

restore the banks’ confidence in each other. In Germany, the financial market stabilisation fund

will play a pivotal role: this fund will have the power to extend guarantees for new loans and

deposits totalling up to €400bn in return for a fee. Furthermore, it will be able to inject between €70bn and €80bn into financial institutions, either as fresh capital or by purchasing troubled assets. A revision of accounting rules is being considered in order to reduce the necessity of write-downs; due to the lack of liquidity in the markets, the present asset prices are distorted.


In the US, the government rescue package is no longer focused on buying up troubled assets, but rather, as in Europe, on providing guarantees and capital in return for preference shares, which, according to the Fed, will be regarded as tier 1 capital. The nine biggest banks are intending to accept the capital injections in return for partial nationalisation.


Additionally, central banks have announced further liquidity measures. The ECB, for example, will also accept lower-rated collateral up to a BBB– rating in its refinancing operations. Moreover, up until March 2009, all refinancing transactions will be in the form of fixed rate tenders where all bids will be covered. With effect from 20 October, the Bank of England is introducing a new discount window facility enabling banks to borrow gilts against lower-rated collateral.


The money market rates fell in reaction to the rescue measures. The 3-month Euribor declined by 20 basis points to around 5%. But confidence has not yet really been restored in interbank trading. In the eurozone, banks are still preferring to deposit surplus funds at the ECB: in the middle of the week, the deposit facility was being used for a record amount of €210bn.


US Federal Reserve chairman Ben Bernanke has expressed confidence that the measures taken by central banks and governments will stabilise the financial markets. However, he pointed out that the economic downswing in the US had started long before the financial crisis escalated, and that the crisis itself could delay recovery. The further weakening of economic activity described in the Beige Book is clearly reflected in the September retail sales and industrial production figures, which had fallen more sharply than expected; the same applies to the first regional purchasing manager indices for October.


Mr Bernanke is expecting weak US growth and declining commodity prices to restore price stability. Instead of inflation worries, the Fed is now focusing on recession and financial market risks only. Thus markets are pricing in Fed funds rate cuts, regardless of the unscheduled internationally co-ordinated 50 basis point interest rate cut on 8 October. Rates are expected to be cut to at least 1.25% at the end of October. However, the president of the San Francisco Fed, though skeptical about the economy, expressed reservations on further interest rate cuts.


Interest rate speculation is not weighing on the dollar, as there is much more leeway to lower interest rates in the eurozone, where rates are still much higher. We are expecting the ECB to take advantage of this, because the economic risks identified beforehand have now materialised and the risk of inflation is diminishing.


Next week there are only a few US indicators on the agenda. Leading indicators and existing home sales could have stabilised somewhat in September after their sharp declines. In contrast, October sentiment indicators in the eurozone will be pointing downwards again. Partly for this reason, risk aversion is unlikely to wane in the markets, and thus the euro is unlikely to strengthen against the dollar.


Peter Meister +49 69 718-2600

Economics Department

+49 69 718-3642

[email protected]

Foreign Exchange Trading

[email protected]

Jörg Isselmann

+49 69 718-2695

Matthias Grabbe / Klaus Näfken

+49 69 718-2688


This report has been prepared by BHF-BANK Aktiengesellschaft on behalf of itself and its affiliated companies (together "BHF-BANK Group") solely for the information of its clients. The information and opinions in this document are based on sources believed to be reliable and acting in good faith, but no representation or warranty, express or implied, is made by any member of the BHF-BANK Group as to their accuracy, completeness or correctness. Opinions and recommendations are given in good faith but without legal responsibility and are subject to change without notice. The information does not constitute advice or personal recommendation, for which the duty of suitability would be owed, but may facilitate your own investment decision. Moreover, you should seek your own advice as to the suitability of an investment matter mentioned herein. Investors are reminded that the price of securities and the income from them can go down as well as up and that the past performance of an investment or a market is not necessarily indicative for future results. This document is for information purposes only. Descriptions of any company or companies or their securities mentioned herein are not intended to be complete, and this document is not, and should not be construed as, an offer to sell or solicitation of any offer to buy the securities mentioned in it. BHF-BANK Group and its officers and employees may have a long or short position or engage in transactions in any of the securities mentioned in this document, or in any related securities. This publication must not be distributed in the United States.

© 2007 BHF-BANK Aktiengesellschaft

All rights reserved. Please mention source when quoting from it.



Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."

Actionable trading levels delivered to YOUR charts in real-time.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Mon 10 Sep 2018
AA 08:30 GB- GDP, Trade, Output
Tue 11 Sep 2018
AA 08:30 GB- Employment Decision
A 09:00 DE- ZEW Survey
Wed 12 Sep 2018
A 12:30 US- PPI
A 14:30 US- EIA Crude
A 18:00 US- Beige Book
Thu 13 Sep 2018
A 1:30 AU- Employment
AA 11:00 GB- Bank of England Decision
AA 11:45 EZ- European Central Bank Decision
A 12:30 US- Weekly Jobless
AA 12:30 US- CPI
Fri 14 Sep 2018
A 08:30 GB- GDP
AA 12:30 US- Retail Sales
A 13:15 US- Industrial Production
AA 14:00 US- prelim University of Michigan

John M. Bland, MBA
co-founding Partner,

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube

Max McKegg's Daily Forex Trading Forecasts

Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.

Request a TRIAL of Max's Forex Service.


Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map

Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105