Monday, March 21, 2011

Euro 'Toppish' Ahead of EFSF Ratification

MarketPulse FX submits:

By Dean Popplewell

European leaders will gather at the end of this week to conclude the ratification of the EFSF program that they agreed to in principle a few weeks back. The market seems to have already priced in a successful decision, with the EUR trading north of 1.41 and sovereign spreads stabilizing. Consensus believes that Euro-leaders will succeed in the end in "hashing out an agreement" that allows for a larger EFSF and financing assistance for Portugal.

However, a week is a long time in politics, with leaders continuing to stake out negotiating positions, like Prime Minister Kenny from Ireland. The Irish continue to have a quarrel with the conditions of their bailout and expect them to provide a period of anxiety over the coming days, putting pressure on the EUR more likely than further optimism and advance.

The USD is stronger in the O/N trading session. Currently, it


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