Monday, 23 January 2012

Daily Forex Brief London: Monday 23rd January 2012

Today's meeting of eurozone finance ministers in Brussels has a very full agenda to consider. There is the latest draft of the fiscal compact to discuss (see below), a review of the progress made in the Greek debt talks, and a conversation on a draft for the European Stability Mechanism (ESM). The latter apparently includes collective action clauses, although any debt write-offs will need to comply with IMF standards. Germany and France are both keen to wrap up the ESM issue as soon as possible, although it can only take effect once it has been ratified by those countries representing 90% of its capital. It is unlikely that any of these issues will be fully resolved at this meeting, although some progress will be made. Interestingly, these days the single currency is setting less store in meetings such as these, in sharp contrast to those held in the final quarter of last year. After threatening 1.30 at one stage early on Friday, the euro drifted back to near 1.29.

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