Can you figure the markets out? I can't. Yesterday the euro gained 2.5% in value against the dollar. Did the Greek crisis get resolved? No. Did the Slovakian parliament ratify the creation fo the European Financial Stability Fund ? No. Was it announced that next Monday's scheduled EU summit to deal with the crisis had been postponed for a week? Yes. Presumably, it was the details of he bail-out of Dexia that had markets humming ... along with the continued good mood music from discussions between German Chancellor Angela Merkel and French President Nicolas Sarkozy. "Merkozy" may yet provide the necessary European leadership to steer the single currency through these troubled times. Or it could be none of the above. A good summary is here. http://www.telegraph.co.uk/finance/financialcrisis/8819104/Key-eurozone-... My man Steve Gallo, the currency analyst's currency analyst explains things this way: " EURO sentiment (that is, sentiment towards the currency itself) has improved markedly over the last week or so as positioning in the foreign exchange markets has shifted and EUR bears have been unable to do anything but become less aggressively bearish." Bears join the herd - mix animal metaphors. Gallo continues: "But the other portion of these rallies is the nature of sentiment towards the euro project as a whole (as opposed to just the currency), politically, financially and economically speaking. As for this aspect of the latest rally, the level of distrust on the part of market participants and investors is arguably not much lower than where it was during late September and the first few days of the current month" In other words, don't take the jump in the euro's value as signalling some deeper positive feeling about the euro crisis. Finally, if you are one of those people who can't get enough of the euro crisis, the good folks at the Guardian & Observer newspapers put together this chart on key Euorpean nations debts & unemployment rates. http://image.guardian.co.uk/sys-images/Observer/Pix/pictures/2011/10/08/... I find it very helpful.
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