As the focus remains on trying to find a comprehensive solution to Europe’s sovereign debt crisis tensions are likely to be running high again this week in the run up to Thursday’s ECB meeting and Friday’s EU Summit. The Summit is expected to put forward proposals for EU treaty changes allowing for greater fiscal union in the euro zone, perceived by many as a crucial part of the solution to the current crisis. The euro was modestly higher overnight, with market sentiment described as guarded following the news of fresh …

The euro is holding on modest gains seen versus the dollar and yen overnight, with optimism that Europe could be finally moving towards comprehensive solutions to its debt crisis leading to a round of short covering. Traders are now focusing on a two day meeting of European finance ministers, which starts later today, to see if the group will provide any further details on plans to beef up the fire power of the regions bailout fund, the EFSF. At summit meetings in late October it was decided to leverage the …

The euro fell sharply yesterday and overnight on the back of poor debt auction results from Germany, as well as talk that the French-Belgian bailout deal for Dexia bank is not viable under its original terms. France may have to carry a bigger share of the costs, putting even further pressure on its credit rating. Meanwhile, Germany was auctioning €6 billion of a 10-year benchmark bond. However, it only managed to get away €3.6 billion of this, a cover of 0.65 times, with the average yield at 1.98%. While the …

The euro held steady around the $1.35 level in early morning trade, helped by a round of short covering going into the weekend. Reports of an EU paper on the issuance of common bonds also seemed to help the mood, as did news of an outright victory for the conservative party in Spanish elections. The dollar also came under some mild pressure with a US congressional super committee expected to make some formal announcement today on its plans for $1.2 trillion in budgetary savings over the next ten years. At …

After falling to fresh one month lows of $1.3423, the euro has recouped some of the losses seen versus the dollar and yen yesterday with players reported to be taking profits on recent moves. However, as the threat of contagion in the euro zone continues to build many are concerned at how long the single currency can remain resilient to the region’s sovereign debt problems. Though the problems may not be confined to the euro zone with Fitch yesterday warning of the exposure of US banks to European debt, which …

The euro is holding steady but at the lower end of recent trading ranges as markets continue to focus on the eurozone debt crisis. Optimism following new PMs in Greece and Italy has been undermined by yesterday’s rise in yields and markets will be on edge ahead of this morning’s release of the eurozone Q3 GDP report. Data released early this morning showed that German GDP grew at an expected rate of 0.5% in Q3, an acceleration from 0.3% in the previous quarter. This morning also sees the release of …

Europe is likely to dominate the headlines once again this week as traders watch political developments in Italy and Greece. The expectation is that national governments will be fully operational in both countries over the coming days so markets will be looking for progress on fiscal initiatives and economic reforms. There are new PMs in place in both countries now, with the Italian lower house of parliament giving its final approval to a package of economic measures over the weekend. Sentiment was also boosted overnight by the news that the …