EUR The market seems to be waiting for something to happen. Of course we have two main themes holding the market to ransom at the current moment. European sovereign debt issue and the US debt ceiling /credit rating..it's like a game of who blinks first. Well I think it is unthinkable that the US won't raise it's debt ceiling even though I can't see concrete solutions to reduce the trend of their debt. Not easy anyway. But some analyst are talking about the possibility of a Homeland Incestment Act II which in 2005 saw a repatriation of about Usd 300 billion. Should be more this time and this is dollar bullish. Of course we are dealing with politicians here and they don't think in terms of financial calamity... Or do they? That leaves Europe muddlingnthrough one year one when Greece stole centre stage with it's debt crisis. They are caught in a bind and a very tough decision - to prevent the banks from going down from a haircut and default of Greece or find some more money to prolong the agony. The markets are still calling for a haircut but are tired of this waiting game. A non concrete resolution is EUR big negative if the market perceives that European banks likely to suffer big pains and the prospect of a contagion effect. Still sell rallies with tigh stops. AUD RBA comments seems to confirm wait and see stance with interest rates and I am feeling a little bearish for AUD. Sell for test of 1.05-1.02 if risk off adds at this crucial time. JPY 79-81 BoJ could intervene if it snpmells an opportunity especially if Usd environment is helping maybe?
