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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (73555)	5/18/2010 6:02:49 AM
From: Haim R. Branisteanu	1 Recommendation Respond to of 74559

ECB reveals €16.5bn bond purchases (the US export will suffer very substantialy) By David Oakley and Peter Garnham in London and Ralph Atkins in Frankfurt Published: May 17 2010 16:09 \| Last updated: May 17 2010 20:16 The European Central Bank has bought €16.5bn of eurozone government bonds as part of international rescue plan, amid widespread investor concern that the intervention is not yet big enough to stabilise debt markets. The euro on Monday fell to its weakest level against the US dollar since April 2006 in spite of the €750bn international support package and central bank intervention. The euro has fallen 14 per cent against the dollar this year. The scale of the ECB’s intervention was at the low end of analysts’ expectations. But the move has broken new ground for the guardian of the euro currency, which had previously resisted buying government bonds outright. David Bloom, global head of foreign exchange strategy at HSBC, said: “Prior to the current crisis the euro was deemed to be the Deutschemark in disguise. But the rise in sovereign risk has changed this perspective. It now seems that people think it is a drachma in disguise.” Ulrich Leucthmann, head of foreign exchange research at Commerzbank, said: “What we are currently experiencing is almost like a run on the euro.” Other analysts said the lack of buying interest from long-term investors such as central banks was particularly ominous. There were signs that the weaker euro could lead to a delay in China modifying its effective dollar peg. Yao Jian, spokesman for the commerce ministry, said at a briefing that the Chinese currency had already appreciated significantly recently as a result of the weaker euro, which would hurt China’s exporters. ft.com