News & Analysis

FX traders shifted focus away from European peripherals and toward the FOMC and BOJ central bank meetings early on this week

FX traders shifted focus away from European peripherals and toward the FOMC and BOJ central bank meetings early on this week. But the Greek tragedy refused to leave the stage, and the euro continued to suffer from more EU discord over how to help Greece get out of its debt hole. EU Finance Ministers provided a strategy for emergency "standby" loans in case Greece's ?4.8B austerity measures failed to bring the country's budget deficit back into line with Maastrict Stability Pact criteria. The ratings agencies were out once again with commentary on the stability of US and UK sovereign ratings. Moody's said the US's Aaa rating would see pressure from the budget's 10-yr projections and noted that higher Gilt yields could test the UK's "Aaa" sovereign status over time. Moody's also said that whichever party emerges the winner from upcoming UK elections would take appropriate action on the deficit, even if there is a hung parliament. US TIC data released on Monday provided some ammunition for dollar bears as Chinese holdings of US Treasuries declined for the third straight month.