The recently battered euro received a boost Wednesday (January 12) as a successful bond action in Portugal was generally considered successful by experts.
Portugal was sold about 1.25 billion euro, or $1.62 billion through a bond auction. The impact of the debt sale should help prevent need for a financial bailout in the near future, which is positive news for the European Union, and the euro.
Also good news was the slightly lower (than that last bond auction in 2010) interest rate of 6.716 per cent that the government will have to …

Jean-Claude Trichet faces his toughest challenge yet as widening economic divergences within the euro-zone continue to put strain on Euro wide monetary policy. The Eurozone is clearly operating at two speeds which makes the required fundamental policy changes extremely difficult to implement.

The Euro opens today in a similar position to yesterday’s close. The markets are waiting to see what interest rate Portugal will have to pay for the €1 billion Euro’s they will need to raise through their 4 and 10 year bonds. If the rates are too high they may have to go cap in hand to the European Union and IMF for assistance. The EU has already helped bring the levels down of Portugal’s benchmark 10 year bonds from lifetime highs of 7.3% to the 7% level. Tomorrow also …

The Eurozone is struggling to manage their finances and the euro is suffering significantly as a result. ECB president Jean Claude Trichet will attempt to calm markets fears on Thursday in the ECB press conference. Attempts to calm the markets concerns over the Eurozone however have been numerous in the past few months and have had little effect. It would seem that the more finance ministers and ECB speakers claim there isn’t a problem, the more the market believes that there is.

The UK markets have been hit this morning on disappointing house price news released from the halifax group. The expectation was that house prices would dip 0.4% on a month on month basis. The actual fall was three times this at -1.3%. This news is still being absorbed by the financial markets this morning but does not bode well for the UK economy moving into 2011.

On the back of positive US economic data earlier this week the markets in the US have gained anticipating a positive Non Farm Payrolls result today. The expectation is that NFP’s will add 175,000 versus 39,000 in November. If expectations are not met we could however see the market reel with dissapointment. Non Farms is historically one of the most volatile and influential data releases in the FX calender. The release will undoubtedly set the tone for the day.