Hello koala king and folks.
Good day to you.
Christine Lagard president of the International Monetary Fund IMF was speaking to reporters after the annual meeting. She mentioned that the current situation in the economy is entering a dangerous phase. Confidence is an issue and plans must be in place to reduce the budget deficit and to stabilize and gradually reduce debt. This should be a priority in any economic program
IMF predicts that the growth of Greece would be -5%. The unemployment rate has reached 16.5% and the size of its national debt is more than 157% of the GDP. Substantial results of a rigorous program that Greece had promised to delivered is demanded.
The Greek government which has no money to spend to gain the confidence of lenders is considering more austerity policies and privatization. The decision to press directly on the shoulders of the taxpayers will exacerbate unemployment and poverty in this country.
The FOMC statement was published on Wednesday and the US Federal Reserve reported that the economic indicators have fallen to a history low of ten years. The latest action would be Operation Twist which is to reduce holdings of short term bonds in favor of long term bonds.
Finance ministers, economists, bankers of G20 met in Washington on Friday at the headquarters of the International Monetary Fund to discuss key economic challenges facing the world. With continued fears of a global economic future, financial markets continued to be volatile. Regardless, the meeting seemed to have failed to assure investors.
The reality is that the markets are probably well aware of the steps required to end the financial crisis in the euro area. Having said so, these steps are difficult to be implemented due to the different economies. It will probably require closer integration of the various economies which is apparently not a preferred route for the leaders of the euro zone at the moment.
From a technical perspective:
As of the week and I was expecting, the EUR/USD could break A line and continue to decline. Given the current climate of risk aversion and lack of risk appetite, the main trend is still downward. The first target is predicted to drop to FIBO 261%.
Have a great weekend.
Masoud is a businessman and a Senior Forex Koala. Connect with him at our page on Facebook.
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