Forex

January 03 2013 1:09 PM

With the possible exception of the New York Times' editorial board (and the cast of The Jersey Shore), everyone on the planet understood that the United States Government needs to cut spending, increase taxes, or both. Instead, after months of political posturing and hand wringing, the Federal Government has just delivered the exact opposite, a deal that increases spending and decreases taxes. The move lays bare the emptiness of budget legislation, which can be dismantled far easier than it can be constructed.

January 03 2013 9:10 AM

With the return of Shinzo Abe and his Liberal Democratic Party to power in Japan, the market for US Treasuries may be losing its last external pillar of support. Re-elected on September 26th, Abe has quickly set a course for limitless inflation, saying Japan must "free itself from deflation and the strong yen." This is significant to the global economy as Japan is the largest foreign power left with a strong appetite for US Treasuries. If this demand falters, the Fed may be the only remaining buyer of new Treasury issuance.

January 02 2013 8:58 AM

The euro soared on Wednesday morning, trading at 1.3270. When the US reached a fiscal cliff deal at the last minute, markets turned and risk appetite increased. The euro gained against the dollar as investors switched their money from the dollar to riskier currencies like the euro. The fiscal cliff drove prices up, but as the eurozone moved into 2013, many wondered whether the common currency's recent positive streak would continue. German Chancellor Angela Merkel advised in her New Years address that things would get worse in 2013 before they got better, a sentiment European Central Bank President Mario Draghi expressed earlier in 2012.

December 28 2012 9:51 AM

The euro traded at 1.3194 on Friday morning as investors waited for the outcome of a last minute meeting in Washington, where President Obama is set to meet with both democratic and republican lawmakers about the impending fiscal cliff. The uncertainty surrounding the US fiscal cliff has weighed on risky currencies and added to uncertainty about the common currency.

December 27 2012 8:54 AM

The euro traded at 1.3227 on Thursday morning as confidence in the eurozone continued to bolster the prices. The common currency has been trading above $1.30 consistently since the restructuring and approval of Greece's aid package.

December 26 2012 9:05 AM

The euro traded at $1.3181 on Wednesday morning. The common currency saw little change after markets were closed on Tuesday for the holidays. The eurozone financial crisis seems to have settled since Greece's bailout was restructured and accepted by the region's lawmakers. However, the current political trouble in Italy and uncertainty in Spain have remained to remind investors that the region is far from being in the clear.

December 21 2012 2:12 PM

While it may not be a surprise that the Republicans are preparing to yield on their vow to oppose tax hikes, it should raise investor concerns the world over that an upcoming budget agreement will likely involve a Congressional surrender of its authority to set the federal debt ceiling. In exchange for this, it appears that the Republicans have simply done nothing to halt, or even curb, the dangerous federal spending trajectories or the current drift towards greater state control of the economy. President Obama has politically outmaneuvered the Republicans, even going as far as evoking the Newtown massacre as a reason for quickly concluding a deal. As a result, it is likely that the GOP will bear the blame for any breakdown in fiscal cliff negotiations. They could wear such an outcome as a badge of honor, but nothing indicates that they have the political courage to do so.

December 20 2012 8:27 AM

The euro continued its upward climb on Thursday morning, trading at 1.3209. The common currency has been on a high ever since investor sentiment improved and confidence in the region was restored. Credit rating agency Standard & Poor's upgraded Greece's credit rating to B-minus status on Tuesday after the nation's peers and the International Monetary Fund made a solid commitment to help it stay in the eurozone and climb out of debt over the next few years. The eurozone and the IMF worked together to restructure Greece's bailout terms and create a realistic plan to help get Greece back on track financially.

December 19 2012 8:20 AM

The euro traded at 1.32 on Wednesday morning after reaching a seven month high against the dollar on Tuesday. The common currency's strength was attributed to a higher risk appetite in the market as US lawmakers neared a deal on the impending ‘fiscal cliff'. The fiscal cliff negotiations coupled with increased confidence in the eurozone has given the euro a much needed boost over the past few weeks. The region has been battling a financial crisis for the past three years and many are predicting that 2013 will be the light at the end of the tunnel.