Market speculation that France was about to be downgraded has effectively been denied by the three top rating agencies, but it has offered little relief to the markets or to European (including French) bank shares. There is speculation that a French bank is having serious difficulty and some talk of a French bank raising cash by selling gold forwards.
The euro has plunged from $1.44 testing in Asia and Europe and is now near $1.4200. Momentum studies are over-extended, but a break could see another quick half cent loss. Sterling has pushed convincingly through the $1.6200 level--and is trading at its lowest level against the dollar since July 21. The dollar has broken the JPY77 level and now is near JPY76.40. Last week's BOJ intervention has not been repeated and while the SNB has extended its easing today, it similarly has failed to stem the tide.
US equities are important driver today with sharp opening losses, but keep on eye on European and especially French banks.
New Pressures
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Reviewed by Marc Chandler
on
August 10, 2011
Rating:
