by Collinson FX
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Collinson FX market Commentary: 14 May 2012
Markets steadied to close the week despite some disturbing new from JP Morgan.
The big news that shook markets was for once not the political upheaval gripping Europe. JPMorgan announced a huge loss attributed to some French trader working out of the City of London. This loss was described as a hedging bet gone wrong but to lose over US$2 Billion in under six weeks, it reeks of derivative trades. The loss was substantial but the implications were far more far-reaching. The systemic losses that lead to the GFC had been realized apparently. This was not to happen again so who has their pants down? Further revelations this week will answer more questions.
Meanwhile Europe continued to wobble with the Greek impasse continuing and no end in sight.
The EUR dropped to test 1.2900 and the GBP has also fallen to 1.6070.
The crises engulfing Europe has killed risk appetite and demand pushing the AUD back to parity and the KIWI to around 0.7800.
This week holds plenty of economic indicators but markets will be concentrating on political developments in Europe.
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