Falling Markets and Euro Problems
Clean Financial - The Financial Spread Betting Website

Falling Markets and Euro Problems

Falling Markets and Euro Problems


Trading Features / Strategies from Simon Denham of Capital Spreads.

In spite of my repeated advice to clients to sit on their hands a steady stream of buyers was seen throughout yesterday’s sessions as punters tried to ‘bottom pick’. The steady destruction throughout the day and early evening left most longs hanging on the ropes. Only those with deep pockets were able to withstand the drama and this morning everything seems just a little bit rosier.

Rumour trickled around dealing rooms about the viability of a range of major banks with, in the UK, the focus settling on RBS/NatWest. The stock closed down over 20% dropping 44p to 145p a new low for the year/decade. The bank was the obvious target after the huge disaster of the ABN purchase had hit its co-bidder Fortis in Belgium. Lest people forget RBS paid for ABN, in the main, with borrowed money.


Financial Spreads » "With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." » read Financial Spreads review.

Whilst the focus has been on the exchanges the real drama was unfolding in the currency markets. At one point yesterday the Euro had fallen by over ¥10 from the close on Friday making a low print at ¥135.03. This represented a one day fall of 7% of one major currency versus another and added to the ¥25 fall already seen since July. Aside from the UK’s ejection from the ERM back in the ‘90s I cannot remember such a violent dislocation. The entire Euro plan is being called into question as the absence of any central lender of last resort is causing individual nation States to “make it up as they go along”. This is creating something of a problem for holders of the Euro itself. If nations start to pull out of the Euro project (and I do not actually believe things are even remotely this bad yet) it will make valuation of assets in the currency almost impossible. Better to dump them for the time being and put your cash into Yen, Dollars and even (cough, cough) Pounds.

The fact that two of the weakest nations have ‘guaranteed’ deposits should not distract depositors from what is perceived as safe and what is actually safe. If the s*** really hits the fan then I am afraid that neither the Greeks nor the Irish could possibly afford the cost. The guarantee would be worthless.



The above comments do not constitute investment advice and neither Capital Spreads nor Clean Financial accept any responsibility for any use that may be made of them.


Capital Spreads » "With Capital Spreads you get all the normal
advantages of Spread Betting plus..." » read Capital Spreads review.




Risk Warning: Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

Article provided / approved by Capital Spreads which is a trading name of London Capital Group Ltd which is authorised and regulated by the Financial Services Authority (FSA), FSA Register number 182110.

'Falling Markets and Euro Problems' edited by SD, updated 07-Oct-08



Also see:

Trading Features / Strategies Index – an index of all the Trading Features.



Free Financial Email Updates
Q) Average Trading Results?

A) Get free trading tips, offers, price updates, important news and more!
All Free - Click here!


Risk Warning: Spread betting and CFD trading carry a high level of risk to your capital and you may lose more than your initial investment. Spread betting and CFD trading may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

The contents on CleanFinancial.com are for information purposes only and are not intended as a recommendation to trade. Nothing on this website should be construed as investment advice.

Neither CleanFinancial.com nor any contributing company/author accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.


* Tax law is subject to change or may differ if you pay tax in a jurisdiction other than the UK.

Home
Capital Spreads
City Index
ETX Capital
Financial Spreads
GFT
IG Index
InterTrader
Spreadex
Spread Betting Tips
1) Daily Trading Tips
2) Financial Tips
3) Financial Tipping
4) Strategies
Spread Betting News
Daily Analysis
Daily Closing Update
Daily Market Data
Live Charts
Live Prices
Trading Videos
Stock Market Spreads
Stock Market Reports
Stock Market Analysis
Stock Market Charts
Stock Market Prices
FTSE 100 Spreads
Dow Jones Spreads
DAX 30 Spreads
Forex Spreads
Forex Reports
Forex Analysis
Forex Charts
Forex Prices
EUR/USD Spreads
GBP/USD Spreads
Commodities Spreads
Commodities Reports
Commodities Analysis
Commodities Charts
Commodities Prices
Gold Spreads
Crude Oil Spreads
Shares Spreads
Share Tips
Share Trading Reports
Share Charts
UK Shares
US Shares
Spread Betting
Bonds Spreads
Interest Rate Spreads
Spread Trading Blog
Financial Fixed Odds
CFD Trading
Trading Features
Trading Forum
Technical Trading
Free Newsletter
Why Spread Bet?
What's Spread Betting?
Glossary - part 1
Glossary - part 2