User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Friday March 26, 2010 - 19:21:22 GMT
BHF-Bank -

Share This Story:
| | Email

FX Briefing - IMF intervention: acceptable in the short term, but not a permanent solution

FX Briefing 26 March 2010


Eurozone countries agree on combined EMU-IMF aid plan for Greece

Business climate data signal acceleration of growth in eurozone

Dollar’s interest rate advantage against the euro widens on higher yields in US

US employment set to rise significantly in March


IMF intervention: acceptable in the short term, but not a permanent solution

The dollar has been firm this week. The upbeat equity market could have supported the greenback: the Dow is now heading towards the 11000 mark, and would thus return to pre-Lehman levels. But the main impetus came from Europe. The to-ing and fro-ing in the eurozone on the issue of Greece spooked the markets and pushed EURUSD below 1.33 temporarily. The strong economic data from the eurozone had little effect, however.


The yen, which has little to do with Greece, has weakened practically simultaneously with the euro. USD-JPY climbed over 92.60 – its highest level since the beginning of January. We suspect that the very low Japanese interest rates, the brighter outlook for the global economy and persistent speculation on the appreciation of the Chinese yuan are boosting capital outflows. But the current exchange rate movement might also be connected to the end of the fiscal year in Japan.


Eurozone’s compromise on Greece

Eurozone government leaders, who met on Thursday in Brussels, have finally agreed on a potential aid package (the details of which are still to be finalized) for Greece. Doubtless at Germany’s insistence, the plan envisages a combination of financial support from the IMF and eurozone member states on the basis of their respective ECB capital key. The IMF would contribute a substantial amount, but the majority of the financial aid would come from bilateral loans from Eurozone countries.


Decision to give loans will be based on assessments by the EU Commission and the ECB. Strict lending conditions will have to be adhered to and there will be no preferential terms. The government leaders emphasised that these measures were a last resort: Greece could only take advantage of the mechanism if it were unable to obtain sufficient funding in capital markets. In this connection, the government leaders stressed that they were convinced that the austerity measures implemented by the Greek government would suffice. They also pointed out that, as Greece had not requested financial aid, no decision had to be taken.


With this plan, the eurozone countries should succeed in easing the acute problem with Greece. Spreads between 10-year German and Greek government bonds have actually narrowed to 305 basis points. EUR-USD has also rebounded from its lows and is now just under 1.34.


In the present environment, the solution chosen is appropriate. There is obviously a loophole in the EU treaty: the case of a country becoming insolvent should theoretically never come about. But apparently such cases can occur. It therefore makes sense to call on the International Monetary Fund’s expertise and resources to ensure the consolidation of public finances. In addition, IMF participation is attractive from a political point of view, as less tax revenues would be required for an eventual bail-out.


This should not be a permanent solution, however. The eurozone needs tools to prevent excessive deficits and debts more effectively and precautionary arrangements in case a crisis does happen to occur. The crisis mechanism ought to function without the IMF, as the latter is responsible for providing international liquidity in balance of payment crises, not for budgetary crises. Furthermore, it is not quite in accordance with the EU treaty, if countries obtain central bank loans indirectly via the International Monetary Fund.


Strong economic signals

The strong economic data from the eurozone had very little impact on the market, presumably partly because of all the squabbling about aid for Greece. Almost all business confidence surveys in the euro area are pointing significantly upwards, particularly the German Ifo business climate index, which rose by almost 3 points to 98.1 in March. Business expectations have been quite optimistic for some time, and now the current assessment has brightened up significantly too: production increased and order book assessment has improved markedly. After a subdued start to

the year in January and February, the economy now seems to be gathering steam.


This is paving the way for a stronger euro. In the short term, however, it could be difficult for the European currency to gain ground – especially as things are looking good in the US too: interest rate spreads between T-notes and the corresponding Bunds have widened noticeably during the course of the week: by more than 10 basis points on 10-year bonds, for example. Spreads on 2- year bonds widened too. The higher yields in the US reflect growing uncertainty about the high assessment levels in the bond market in view of a central bank which is slowly but steadily working towards reverting to normal monetary policy conditions.


Macroeconomic data also confirm this trend. At the end of next week, the US labour market report for March will be published. Observers are almost unanimously of the opinion that employment will have risen again significantly for the first time, partly due to weather-related effects and extensive public recruitment for the census. We ourselves are predicting an increase of 200,000 jobs; some forecasts are much higher. Further figures support this view: the ISM index has been showing robust expansion for months; consumer confidence has been lagging behind a bit so far, but could now have picked up significantly too.

Stephan Rieke +49 69 718-4114


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 19 Mar 2018
Tue 20 Mar 2018
AA 9:30 GB- CPI
A 10:00 DE- ZEW Survey
Wed 21 Mar 2018
AA 03:00 AU- Employment
AA 9:30 GB- Employment
A 12:30 US- Current Account
AA 14:00 US- Existing Homes Sales
A 14:30 US- EIA Crude
A A 18:00 US- Fed Rate Decision
A 21:00 NZ- RBNZ Rate Decision
Thu 22 Mar 2018
AA All Day flash PMIs
AA 9:30 GB- Retail Sales
AA 12:00 GB- Bank Of England Decision
A 13:30 US- Weekly Jobless
Fri 23 Mar 2018
AA 12:30 CA- CPI/Retail Sales
A 12:30 US- Durable Goods
A 14:00 US- New Homes Sales

John M. Bland, MBA
co-founding Partner,
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.



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