EUR Whilst Greece had thier short term relief 2weeks ago, things did come bank to haunt them last week. the ugly issue of Private Sector Involvement or lack of rather, begs the question of who is going to take the cut. The market is demanding some answers and in not getting a clear strategy, has been losing faith in the EUR. The fear now is if there is a rollover with a haircut then the ECB cannot stand to help the banks and treat those papers as good for a draw on the emergency fund. Hence Trichet is adamant that the credit agencies are wrong. Europe cannot afford, I think, to also bailout any of the other countries like Portugal, Spain or Italy. The fear of contagion is great at this moment and the hope is for this to pass or we are likely to see prolonged uncertainty and this would eventually tire the tax payees of France and Germany who will invariably vote thier politicians out. Then what? The Euro is the dream of politicians- they ar e not in power now. So will the current or future leaders of the big brother countries be able to cling onto power if their voters don't see benefits of bailing their poor and naughty neighbors out? Until the coast is clear, don't buy what you don't need. AUD Seems the domestic front is looking a little weak with the economy not able to make up for the losses in productivity following the Queensland floods. The mood from r r A is dovish and seems we are unlikely to see a rate hike this year. China is also showing weaker numbers. Hmmm. AUD may be poised for a slide on the back of EUR though on the EurAud cross, we may see this revisit historic lows if Europe blows up. Liquidate longs. Jpy Safe haven but gingerly now as USDJPY tests below 80. Will BoJ come in? If Europe blows up, it makes no sense for BoJ to come but still short USDJPY if you must but do leave a reasonable stoploss not too far away. GBP Weak weak weak. Sell rallies I would. There won't be a rate hike, in fact talks circulating UK needs QE. 1.63 , if it ever gets back there on the back of Euro woes should be a start point to sell.
