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Reply #65: More than one reason for resilient euro (OH REALLY?) [View All]

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-25-11 08:53 AM
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65. More than one reason for resilient euro (OH REALLY?)
http://www.marketwatch.com/story/more-than-one-reason-f...

The euro can take a punch, and then some. The currencys ability to withstand increasingly horrifying headlines has been the abiding mystery of the forex market since the middle of last year. Its only intensified in recent weeks as the debt crisis swept in from the periphery, threatened to engulf Italy and Spain, and pushed up yields in AAA-rated France, Finland and the Netherlands. A failed German bund auction on Wednesday, however, threatens to change the game, leaving the debt crisis on the doorstep of the euro zones lone safe haven. But even after a sharp drop Wednesday that added to an ugly November for the euro, the shared currency still stands just below $1.3400 versus the dollar, virtually unchanged on the year.

Given mounting fears the euro project may not even survive in its current form, it seems a wonder the euro isnt trading closer to parity with the dollar or at least testing the lows around $1.19 set in mid-2010 after the crisis pushed Greece into a bailout...A popular theory ties the euros ability to take a licking to repatriation. The story has it that euro-zone banks and other institutions, faced with higher capital requirements and a tougher funding environment, are shedding foreign holdings and repatriating assets. It has a certain logical appeal given recent events. But there are plenty of skeptics who contend repatriation is only part of the equation.

David Bloom, currency strategist at HSBC, argues that the euros buoyancy is due to two factors: a strong external position and a sense that a resolution of the crisis remains in the interest of all concerned. The strong external position refers to the euro zones current account, which is close to balance, and a stream of positive portfolio and mergers-and-acquisition inflows, he noted in a recent research note. The current account is the measure of a countrys or regions entire transactions with the rest of the world. Bloom said that while its difficult to parse the data on portfolio flows, theres no clear sign that inflows reflect only bank capital repatriation. And even if repatriation flows were buoying the euro, its difficult to argue it will end soon, he said.

Even in a worst-case scenario, with one or more members ejected from the shared-currency zone, the revised euro would have an even stronger internal and external position, he said. The turmoil surrounding the exit would likely spur a short-term run to the dollar, but would likely be followed by a strong euro bounce, Bloom noted...
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  -STOCK MARKET WATCH, Friday, November 25, 2011 Pale Blue Dot  Nov-25-11 05:44 AM   #0 
  - I hope everyone had a great holiday! No reports today. nt  Pale Blue Dot   Nov-25-11 05:45 AM   #1 
  - and the same to you -- ours was a wonderful feast. nt  xchrom   Nov-25-11 06:28 AM   #5 
  - We talked turkey  Demeter   Nov-25-11 06:51 AM   #15 
  - Lions lost. Dolphins lost. But the new Muppet Movie had us all laughing!  Roland99   Nov-25-11 12:07 PM   #87 
  - Oil hovers above $96 amid Europe debt worries  Pale Blue Dot   Nov-25-11 05:45 AM   #2 
  - U.S. Stock Futures Fall; S&P 500 Poised for Slump  Pale Blue Dot   Nov-25-11 05:47 AM   #3 
  - "A wafer-theen Mitt"  Hissyspit   Nov-25-11 06:02 AM   #4 
  - One of the Weirdest, Grossest Films I've Ever Seen  Demeter   Nov-25-11 06:52 AM   #16 
     - I once saw it (again) at a midnight movie. It was more entertaining for me  TalkingDog   Nov-25-11 01:03 PM   #88 
  - weird dupe. nt  xchrom   Nov-25-11 06:30 AM   #6 
  - europe: Italy forced to pay record interest rates at auction  xchrom   Nov-25-11 06:30 AM   #7 
  - Hungary's debt downgraded by Moody's to junk status  xchrom   Nov-25-11 06:31 AM   #8 
  - I'm sure it was a financial attack  Demeter   Nov-25-11 06:54 AM   # 
     - hungary is a pretty vibrant place.  xchrom   Nov-25-11 06:56 AM   #18 
  - Clegg: 1bn scheme will 'provide hope' to young jobless  xchrom   Nov-25-11 06:40 AM   #11 
  - Why Not Pull the Trigger on Greek Default Swaps?  xchrom   Nov-25-11 06:45 AM   #13 
  - Eurozone debt crisis live: Italian bond yields spike  xchrom   Nov-25-11 06:54 AM   #17 
  - Amid crisis, Italy confronts a culture of tax evasion  Demeter   Nov-25-11 08:44 AM   #61 
     - now that's interesting.  xchrom   Nov-25-11 09:06 AM   #69 
  - Only German pain can solve euro crisis  xchrom   Nov-25-11 07:13 AM   #22 
  - U.K. stocks rise after nine sessions of losses  xchrom   Nov-25-11 09:08 AM   #70 
  - asia: Japan's consumer prices fall on weak domestic demand  xchrom   Nov-25-11 06:33 AM   #9 
  - Hong Kong Jeweler Plans $3 Billion IPO  xchrom   Nov-25-11 06:48 AM   #14 
     - Chow is probably the family name  Demeter   Nov-25-11 07:19 AM   #24 
     - I just thought it was funny.  xchrom   Nov-25-11 07:29 AM   #26 
        - I didn't get the joke  Demeter   Nov-25-11 07:53 AM   #31 
           - it still won't be funny -- BUT it's warren zevon's were wolves of london.  xchrom   Nov-25-11 08:13 AM   #42 
              - Okay, xchrom  Demeter   Nov-25-11 08:14 AM   #43 
     - I loves me  hamerfan   Nov-25-11 02:02 PM   #89 
  - south asia: India MPs in uproar over retail reform plans  xchrom   Nov-25-11 06:36 AM   #10 
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  - Good morning, all you turkeys!  Fuddnik   Nov-25-11 06:57 AM   #19 
  - Cold?  boomerbust   Nov-25-11 07:04 AM   #21 
  - I wore a genuine cardigan over my T-shirt  Demeter   Nov-25-11 04:45 PM   #91 
  - GO CARDS!  Roland99   Nov-25-11 02:15 PM   #90 
  - Walmart Shoppers  boomerbust   Nov-25-11 06:58 AM   #20 
  - I've got Black Dog Friday going on here.  Fuddnik   Nov-25-11 07:19 AM   #23 
  - I'm staying home  DemReadingDU   Nov-25-11 07:24 AM   #25 
  - I'm working  Demeter   Nov-25-11 07:54 AM   #32 
  - holy crap. glad I'm at work  Roland99   Nov-25-11 08:04 AM   #36 
  - Infographic: Media Consolidation The Illusion of Choice  DemReadingDU   Nov-25-11 07:37 AM   #27 
  - This needs to go viral! Or at least, to GD  Demeter   Nov-25-11 07:56 AM   #33 
  - THANK YOU: I've been looking for updated stats & a graphic.  snot   Nov-25-11 09:39 AM   #78 
  - Bruce Bartlett - The 'do nothing' solution to US fiscal crisis  Demeter   Nov-25-11 07:50 AM   #28 
  - Bond buyers threat to Santander  Demeter   Nov-25-11 07:51 AM   #29 
  - Federal Reserve launches new round of stress tests  Demeter   Nov-25-11 07:51 AM   #30 
  - Fed policymakers urge further easing  Demeter   Nov-25-11 08:03 AM   #34 
  - US growth revised down to 2%  Demeter   Nov-25-11 08:04 AM   #35 
  - US banks scale back mortgage collection  Demeter   Nov-25-11 08:08 AM   #37 
  - Lower loss provisions boost US banks  Demeter   Nov-25-11 08:23 AM   #49 
     - Stimulus hopes fade as deficit deal fails  Demeter   Nov-25-11 08:31 AM   #54 
  - Interest soars in US peer-to-peer lending  Demeter   Nov-25-11 08:09 AM   #38 
  - Euro leaders push for fiscal crackdown  Demeter   Nov-25-11 08:11 AM   #39 
  - Brussels plans to bring eurozone to heel  Demeter   Nov-25-11 08:26 AM   #51 
     - Sweden calls for prudent nations to be on standby  Demeter   Nov-25-11 08:27 AM   #52 
        - French banks still hostage to eurozone crisis  Demeter   Nov-25-11 08:38 AM   #60 
  - Unions strike as Fitch downgrades Portugal  Demeter   Nov-25-11 08:12 AM   #40 
  - France pushes for Iranian oil embargo  Demeter   Nov-25-11 08:13 AM   #41 
  - US bank credit default swaps jump  Demeter   Nov-25-11 08:19 AM   #44 
  - Europeans turn to US junk bonds to renew loans  Demeter   Nov-25-11 08:20 AM   #45 
  - SocGen sues over disaster claims  Demeter   Nov-25-11 08:21 AM   #46 
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  - Great toon!  RUMMYisFROSTED   Nov-25-11 08:23 AM   #48 
  - Corzine called to testify on MF Global collapse  Demeter   Nov-25-11 08:24 AM   #50 
  - MF Global shortfall doubles to $1.2bn  Demeter   Nov-25-11 08:34 AM   #56 
  - Pakistans envoy to US quits over Memogate  Demeter   Nov-25-11 08:28 AM   #53 
  - Chevron faces possible ban over Brazil leak  Demeter   Nov-25-11 08:35 AM   #58 
  - Greenberg sues for $25bn over AIG bail-out  Demeter   Nov-25-11 08:37 AM   #59 
  - And rightfully so!  Turbineguy   Nov-25-11 08:51 AM   #64 
  - He ought to know.  westerebus   Nov-25-11 09:48 AM   #80 
  - Decline in Commodities Is 'Artificial'  Demeter   Nov-25-11 08:47 AM   #62 
  - Oil price could strangle economic recovery hopes  Demeter   Nov-25-11 08:48 AM   #63 
  - More than one reason for resilient euro (OH REALLY?)  Demeter   Nov-25-11 08:53 AM   #65 
  - Students in Debt: "Can't Pay, Won't Pay, Don't Pay"  Demeter   Nov-25-11 08:58 AM   #66 
  - Meanwhile, more higher edu has become owned or controlled by corporate interests.  snot   Nov-25-11 09:44 AM   #79 
  - I believe this is incorrect on one point  Tansy_Gold   Nov-25-11 11:42 AM   #85 
  - Why Merkel Remains Opposed to Euro Bonds  Demeter   Nov-25-11 09:01 AM   #67 
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  - Why Not Pull the Trigger on Greek Default Swaps?  Demeter   Nov-25-11 09:13 AM   #71 
  - GE Filed 57,000-Page Tax Return, Paid No Taxes on $14 Billion in Profits  Demeter   Nov-25-11 09:14 AM   #72 
  - FUCKERS! n/t  Hotler   Nov-25-11 10:53 AM   #82 
  - The Worst Big Bank on Wall Street?  mahatmakanejeeves   Nov-25-11 09:22 AM   #73 
  - As far as I can tell, they are ALL bad  Demeter   Nov-25-11 09:27 AM   #75 
  - The money quote:  mahatmakanejeeves   Nov-25-11 09:56 AM   #81 
  - More fuckers. n/t  Hotler   Nov-25-11 10:59 AM   #83 
  - U.S. developing anti-laundering rules for advisers  Demeter   Nov-25-11 09:25 AM   #74 
  - "The U.S. Treasury Department "  Hotler   Nov-25-11 11:06 AM   #84 
  - Have a good Friday, All!  Demeter   Nov-25-11 09:30 AM   #76 
  - Have a good Friday, All!  Demeter   Nov-25-11 09:30 AM   #77 
  - Markets close slightly down on the day (at daily lows, though)  Roland99   Nov-25-11 12:06 PM   #86 
 

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