Daily Fundamental Analysis 15/06/2010 FXCBS

Tuesday June 15 , 2010

Daily Fundamental Analysis

The euro rose yesterday due to the improved investor appetite for higher risk Dollar Bonds and assets, eventually that has strengthened its covering of short positions the European unified currency, which led to the rise after recent recorded during the lowest in four years. Analysts say it is unlikely to lead to recovery of the euro release from the downward trend, with continuing structural problems in the euro zone, which severely affected the single currency. The euro was down 15 per cent against the dollar this year, but managed to rise 1.6 per cent during the last week, after hitting its lowest level in four years at 1.1876 dollars. Markets have witnessed a global shake-up on Wednesday in a selloff for the second day by fears that the growing debt crisis in Europe could threaten the global economic recovery. Euro fell against the U.S. dollar to the level of 1.3143 which is the lowest level since April 2009 due to fears of traders that the debt crisis could spread to other European countries facing challenges such as Portugal, Spain, Italy and Ireland.

The Minister of Finance in Greece, George Papaconstantinou, said on Sunday in an interview to a local newspaper that Greece is moving in the right way, Greece almost fulfilled all its obligations. He highlighted that the budget showed a decrease of 40 per cent compared with last year, stressing that there is no need to impose further austerity measures.

On the other hand the public debt in Italy in April rose to a record level, reaching 1.813 trillion Euros (2.215 trillion U.S. dollars), up 0.8% from the level recorded in March this prompted the Bank of Italy (central bank) to warn that public debt will arrive at the end of the year to the level of 118.4% of GDP, after reaching 115.8% in 2009. the bank said that tax revenue fell 1.8% in the first four months of 2010 compared to the same period last year, to reach 104.8 billion Euros (128 billion dollars).Earlier, a U.S. newspaper said that the French and German banks are most exposed to the debt crisis of Europe, where a foreign debt of the weaker economies in the euro area nearly a trillion dollars.

Senior Analyst / Ali Hasan /FXCBS

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