Collinson FX Market Commentary- 28 May 2012 - Preparing for Greek exit
by Collinson FX on 28 May 2012
Collinson FX market Commentary: 28 May 2012
Greek marinas suffering .. .
Markets closed the week a little shell shocked after more turmoil in Europe.
The Debt/Deficit crises spread to Spain with one of the largest Banks (Bankia) requesting a $23 Billion Government Bailout.
S&P added to the mess by downgrading further Spanish Banks. This crises may well spread across other European Banks with runs likely.
Plans are now afoot to ring-fence the spread of contagion and prepare for the exit of the Greeks. The precedent would then be set and it will be who stays and who goes.
The single currency dipped below 1.2500 looking extremely vulnerable with Greek elections not due until June 17th.
The instability has shattered market confidence and now economic data is starting to reflect this. The commodity currencies stabilised just above lows with the KIWI 0.7520 and the AUD 0.9750.
The new week will focus on Europe and the Banks and a close look at US economic reports. Housing and Employment will be key. The start will be slow with US markets closed for the Memorial Day long Weekend.
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