Renewed Strength of EURO Threatens Economy

peaceandlove · 03-21-2009, 07:31 AM

Renewed Strength of EURO Threatens Economy

By Matthew Saltmarsh Published: March 20, 2009

PARIS: After a brief respite, the euro is gaining strongly against the currencies of its main trading partners, further threatening the Continent's wilting economy. That is adding to pressure on the European Central Bank to enact radical steps similar to those that are weakening the dollar, the pound and the Swiss franc.

A rising currency typically dampens demand for exports, an important component of growth. That in turn slows production in factories, with ripple effects on related industries and on jobs.

Since the start of the month, the euro has gained about 7.8 percent against the dollar, 4.7 percent against the pound and 3.1 percent against the franc.

Despite falling on Friday, the euro still posted its biggest weekly gain of the year against the dollar. In late trading in New York, it was at about $1.36.

Jean-Michel Six, chief European economist at Standard & Poor's, forecast that the euro would push through $1.60 by the end of September, and also pass the parity level against the pound by then.

"If the euro keeps rising, it will be really grim news for the euro economy, which is already in very bad shape," said Paul de Grauwe, a professor at the Catholic University of Leuven in Belgium.

Article continues: http://www.campaignforliberty.com/wire.php?view=3543

peaceandlove · 03-21-2009, 07:41 AM

World markets mixed on worries about US inflation

By LOUISE WATT
Associated Press Writer

Mar 20, 7:54 AM EDT

LONDON (AP) -- Stock markets were mixed Friday as investors turned cautious amid worries the U.S. Federal Reserve's latest move to combat recession in the world's largest economy will lead to rampant inflation.
By noon in mainland Europe, Britain's FTSE 100 was down 0.4 percent to 3,801.84, France's CAC 40 fell 0.4 percent to 2,765.47, while Germany's DAX rose 0.3 percent to 4,053.89.

Banking stocks, which had surged earlier in the week after the Fed announced it would start buying Treasurys to help open up tight credit markets, fell across Europe on Friday. HSBC dropped 19 percent, Barclays slipped 4.4 percent and Dexia lost 9.5 percent.

"I think some of the luster from the announcements earlier in the week has gone," said Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, referring to the Fed's move, similar measures in Britain, and proposals by UK regulators to strengthen bank oversight.

"I think some questions are being asked along the lines of 'just how much profit will be taken away from the banks.' There are still the concerns around the economic situation which continues to overhang the market," he added. "Until the employment and the housing market are sorted in the U.K. and U.S. it's going to be difficult to have any meaningful movement."

Article continues: http://www.campaignforliberty.com/wire.php?view=3526

Bernanke tries to soothe small banks' bailout anger
Fri Mar 20, 2009 12:49pm EDT

PHOENIX (Reuters) - The United States needs a safer way to shut down large nonbank financial firms without destabilizing the entire financial system, Federal Reserve Chairman Ben Bernanke said on Friday.

"We have such a regime for insured depository institutions, but it is clear we need something similar for systemically important nonbank financial entities," he said in prepared remarks to a community bankers convention in Phoenix.

"Improved resolution procedures for these firms would help reduce the too-big-to-fail problem by giving the government the option of safely winding down a systemically important firm rather than keeping it operating," he said.

Bernanke said the central bank has "generally been encouraged" by the market response to its myriad of lending programs.

If a newly launched program called the Term Asset-Backed Securities Loan Facility -- or TALF -- works as planned, it should ease credit constraints on consumer, business and mortgage loans, he said.

Source: http://www.campaignforliberty.com/wire.php?view=3534

03-21-2009, 07:31 AM	#1
peaceandlove Avalon Senior Member Join Date: Sep 2008 Location: Turtle Island Posts: 2,776	Renewed Strength of EURO Threatens Economy Renewed Strength of EURO Threatens Economy By Matthew Saltmarsh Published: March 20, 2009 PARIS: After a brief respite, the euro is gaining strongly against the currencies of its main trading partners, further threatening the Continent's wilting economy. That is adding to pressure on the European Central Bank to enact radical steps similar to those that are weakening the dollar, the pound and the Swiss franc. A rising currency typically dampens demand for exports, an important component of growth. That in turn slows production in factories, with ripple effects on related industries and on jobs. Since the start of the month, the euro has gained about 7.8 percent against the dollar, 4.7 percent against the pound and 3.1 percent against the franc. Despite falling on Friday, the euro still posted its biggest weekly gain of the year against the dollar. In late trading in New York, it was at about $1.36. Jean-Michel Six, chief European economist at Standard & Poor's, forecast that the euro would push through $1.60 by the end of September, and also pass the parity level against the pound by then. "If the euro keeps rising, it will be really grim news for the euro economy, which is already in very bad shape," said Paul de Grauwe, a professor at the Catholic University of Leuven in Belgium. Article continues: http://www.campaignforliberty.com/wire.php?view=3543

03-21-2009, 07:41 AM	#2
peaceandlove Avalon Senior Member Join Date: Sep 2008 Location: Turtle Island Posts: 2,776	Re: Renewed Strength of EURO Threatens Economy World markets mixed on worries about US inflation By LOUISE WATT Associated Press Writer Mar 20, 7:54 AM EDT LONDON (AP) -- Stock markets were mixed Friday as investors turned cautious amid worries the U.S. Federal Reserve's latest move to combat recession in the world's largest economy will lead to rampant inflation. By noon in mainland Europe, Britain's FTSE 100 was down 0.4 percent to 3,801.84, France's CAC 40 fell 0.4 percent to 2,765.47, while Germany's DAX rose 0.3 percent to 4,053.89. Banking stocks, which had surged earlier in the week after the Fed announced it would start buying Treasurys to help open up tight credit markets, fell across Europe on Friday. HSBC dropped 19 percent, Barclays slipped 4.4 percent and Dexia lost 9.5 percent. "I think some of the luster from the announcements earlier in the week has gone," said Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, referring to the Fed's move, similar measures in Britain, and proposals by UK regulators to strengthen bank oversight. "I think some questions are being asked along the lines of 'just how much profit will be taken away from the banks.' There are still the concerns around the economic situation which continues to overhang the market," he added. "Until the employment and the housing market are sorted in the U.K. and U.S. it's going to be difficult to have any meaningful movement." Article continues: http://www.campaignforliberty.com/wire.php?view=3526 Bernanke tries to soothe small banks' bailout anger Fri Mar 20, 2009 12:49pm EDT PHOENIX (Reuters) - The United States needs a safer way to shut down large nonbank financial firms without destabilizing the entire financial system, Federal Reserve Chairman Ben Bernanke said on Friday. "We have such a regime for insured depository institutions, but it is clear we need something similar for systemically important nonbank financial entities," he said in prepared remarks to a community bankers convention in Phoenix. "Improved resolution procedures for these firms would help reduce the too-big-to-fail problem by giving the government the option of safely winding down a systemically important firm rather than keeping it operating," he said. Bernanke said the central bank has "generally been encouraged" by the market response to its myriad of lending programs. If a newly launched program called the Term Asset-Backed Securities Loan Facility -- or TALF -- works as planned, it should ease credit constraints on consumer, business and mortgage loans, he said. Source: http://www.campaignforliberty.com/wire.php?view=3534