After an attempted rebound yesterday on talk of a statement from Germany and France on the Greek debt crisis, the euro came under renewed selling pressure late in the day and overnight. A teleconference between all three is now reported to be taking place later today but markets are holding out little hope that this will ease concerns over the sovereign debt problems. German Chancellor Merkel sought to ease fears over a possible Greek bankruptcy, saying that an “uncontrolled insolvency” must be avoided. However, the euro’s downtrend is expected to …

The Euro was hit yesterday with widespread selling pressure after ECB president Jean Claude Trichet announced a change in stance over current monetary policy. Interests rates in the Eurozone currently sit at 1.5% due to previous concerns over inflation risks. Despite inflation sitting above 2% and the ECB’s mandate to maintain price stability and control price pressures there has been a turnaround in policy with the primary concern now being the economic recoveries for the 16 nation Euro based contingent.

Yesterday the Swiss National Bank announced that they would take unprecedented measures to weaken the Swiss Fanc. They have stated that their intention is necessary to coerce the currency into a stable state above 1.20 EUR/CHF. The announcement saw one of the biggest moves seen in the currency markets for a decade.

The forex markets are extremely cyclical at the moment, from one week to the next we are seeing wild swings in sentiment. Last week focus fell on the Pound and a host of negative news forced the Pound lower against the majority of the world’s most actively traded currencies. This week it would appear that focus has now shifted towards selling the Euro.

Risk appetite has improved, with stock markets bolstered yesterday by stronger than expected US consumer spending data which helped relieve some of the worst fears about the economy there slipping back into recession. This sees traditional safe haven currencies under pressure.
The Swiss franc has been particularly hard hit, loosing more than 2% against the euro and dollar at one stage. Here, downside was compounded by Friday’s threat by UBS to charge clients a fee on deposits as a measure to discourage them from hoarding the CHF in recent volatile market …

Yesterday on a whole saw a calmer day on financial markets and with the major currencies, though still somewhat choppy, remain well within familiar ranges. Overall, markets continue to look ahead to Friday’s speech by Fed Chairman, Ben Bernanke with speculation about whether or not he will use the opportunity to raise the prospect of further quantitative easing.
While, against this background, there is a reluctance to place large bets, the dollar initially had a somewhat weaker tone yesterday, with the main gainers commodity currencies such as the Australian and …