MORNING BRIEFING: EU agree safety net for Greece; Euro recovers from 10-month low.

[RTFX-Trading]

MORNING BRIEFING: EU agree safety net for Greece; Euro recovers from 10-month low.

[B][I][U]What’s new:[/U][/I][/B]
Forex: Euro recovers from 10-month low following accord over Greece.
Japan: Nikkei hits 18-month high.
China: Zhong tells US not to push China on Yuan.
Euro zone: ECB’s Trichet says Euro solution for Greece workable.
Euro zone: Euro zone leaders agree safety net for Greece; to include IMF.
United States: Bernanke says Fed’s help still needed.
United States: Fed’s Kohn sees gradual US economic recovery.

[B][I][U]Today:[/U][/I][/B]
[IMG]http://www.rtfx.com/images/news/CAL260310.gif[/IMG]

[B][I][U]Overnight Rates and Indices: [/U][/I][/B]
EURUSD: 1.3374 – 1.3267.
USDCHF: 1.0746 – 1.0678.
GBPUSD: 1.4894 – 1.4807.
EURJPY: 123.90 – 122.99.
USDJPY: 92.78 – 92.39.
DowJones: 10’841 +0.05%
NASDAQ: 2’397 -0.06%
S&P 500: 1’166 -0.17%
Nikkei: 10’996 +1.55%.
Shanghai: 3’059 +1.34%,
Gold: $1’098
Crude Oil: $81.20

[B][I][U]Comments: [/U][/I][/B]

The Euro recovered from a 10-month low following Euro zone agreement over safety net for Greece, which includes the IMF. After hitting 1.3267, the Euro edged up to 1.3355, while the US Dollar also backed away from a 2-month high versus the Yen, as Japanese exporters cashed in their profits.

The Nikkei index rose to an 18-month high and closed with a 1.6% gain from the previous session. This was mainly due to the Dollar’s rise against the Yen this week, which gave a boost to exports, and investors looking to secure dividends ahead of financial year end.

The leaders of Germany and France clinched a deal yesterday on a joint EU-IMF financial safety net for debt stricken Greece. This accord was welcomed by Greece, calling it “fully acceptable”. The support package is reported to be worth between 20 and 22 billion Euros, which is only to be used as a last resort. Tougher terms were imposed by German Chancellor Merkel, which means the aid mechanism can only come into flow under strict conditions and only as a last resort. There would also be a need for a unanimous approval of the Euro zone. In the meantime Greece PM said they will continue with painful austerity measures to cut its huge budget deficit.

European leaders voiced their satisfaction over the reached agreement. ECB President Trichet said that the financial aid mechanism for Greece agreed by euro zone leaders is workable. He also said that he was extraordinarily happy that governments of the euro area found a workable solution.
Meanwhile, the tug of war between China and the US continued over the value of the Yuan. Chinese vice Commerce Minister Zhong Shan told US officials that it would be wrong to force China to raise the value of the Yuan. On the other hand, a Chinese central bank advisor said China could move to more flexibility in its currency; however it needs to take its own domestic factors such as employment into consideration. He argued for greater understanding of China’s domestic concerns by the west.


Have a nice weekend.

Emman Xuereb
Trading Desk
RTFX Ltd
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