Help Is Lost Along the Way - 21.11.2012

The IMF and ECB could not find agreement points in concern with another financial aid tranche for Greece during yesterday meeting. The Eurogroup chairman, Jean Claude Junker explained that the parties were close to the deal but the decision was held over for technical reasons – additional financial calculations are required. Apparently, additional calculations will show that Greece will not be able to reduce its debt from 170% of GDP today to 120% of GDP in 2020, as it is required by the IMF, without new debt relief by the creditors. Euro fell against US dollar and British pound. Growth against yen was also arrested. The EURUSD currency pair fell down from 1.2820 to 1.2735 (see the chart). EURUSD, hourly chart During yesterday economic conference held in NY, the head of FED, Ben Bernanke stated that the next year promises to be pretty much productive for national economy in case the administration manages to find compromise and avoid the “fiscal cliff”. Indecision and delays in negotiations, however, can lead to economic recession, Bernanke said. Among today news coming from the USA, Jobless Claims and Michigan confidence index are widely expected. For tomorrow, we expect trading activity due to the Thanksgiving Day in the USA. As for the currency market, Japanese yen keeps lowering due to expectations of monetary policy easing from BOJ. This morning, the foreign trade data puts pressure on national currency. Export fell by 6.5% in October and the Trade Balance deficit has turned out worse than it was expected. As a result, the U.S. dollar against the yen updated multi-month high, reaching 81.96 (see the chart). USDJPY, daily chart