Daily Market Review 12 of October
OVERVIEW

Among analysts worldwide there is a growing concern that the probability of Euro zone remaining in the current state is quite small. As for a lot of participants the only way to revive their national economies will be abandoning of the union. One of the main principles of the united Europe is financing of the countries that suffer from the fixed currency rate by the countries that benefit from it. As a result there is an unfair dependant existence, when the interests of some countries suffer because of others. In the conditions of the fixed rate and consolidation policy the peripheral states of the union won’t be able to bring back their economies on the track of growth. If Greece left the Euro zone, brought back its national currency and devalued it, then in 3-5 years its economy would be perhaps blooming at least because of the tourism. By the way the cost of Greece bonds in three recent months has doubled because of the hopes that the country would be able to avoid the necessity of leaving the monetary union.

CURRENCIES

EUR/USD

The Euro was actively purchased and its rate against the US Dollar appreciated from 1.2824 to 1.2951 with further dip to 1.2940. It is too early to talk about the more active upward trend taking to consideration the absence of reasons for stable growth and also the proximity of EU leaders’ summit that will take place on October 18-19 and announcement about the aid to Greece. In this connection the return to the area of 1.2600 - 1.2720 would be more natural than the ascend to 1.3000.



GBP/USD

Yesterday the Pound grew against the Dollar from 1.5983 to 1.6053. The Pound strengthened its positions against the Euro and continues to have demand in Europe taking advantage of the Spain credit rating downgrading by S&P. Apparently the Pound just follows the trend of the Euro though the market is flat. So the bullish trend is not too strong.