| Submit your comments on this article |
| Europe |
| Greek woes hit Asian shares, euro down |
| 2010-05-06 |
| [Dawn] A tumble in global stocks spreads to Asia on Wednesday as fears heightened that Greece's debt woes could spread to other countries, which pushed the euro down to one-year lows against the dollar. Shares in Europe are expected to open little changed, stabilising after the FTSEurofirst 300 index of leading European shares dropped 3 percent to a two-month closing low on Tuesday. The MSCI index of Asia ex-Japan stocks fell nearly 2 percent, with Shanghai and Hong Kong hitting seven-month and nine-week lows, respectively, as scepticism over the 110 billion euro ($142 billion) bailout plan intensified. The euro, which suffered its steepest one-day loss since last June in the previous session, notched another one-year low at $1.2936 before recovering slightly. Traders expected the single currency to remain under pressure. "One gets the feeling that the euro zone is turning out to be a basket case and of course rumours about Spain and Portugal's sovereign debt aren't helping. I suspect the market wants to take the euro to as low as $1.25 in the short term," said Joanthan Cavenagh, currency strategist at Westpac in Sydney. Markets in Japan, Korea and Thailand were closed for holidays. Risk aversion lifted the dollar up, with its index gaining 0.26 percent on top of a 1.4 percent rise on Tuesday. That was the biggest daily gain so far this year and took the index to the highest since May 2009. Oil extended losses falling towards $82, following the steepest one-day percentage loss in three months on Tuesday, on rising inventories and a firm dollar. "A combination of worries including contagion to Spain and Portugal, policy tightening in China, debt concerns in the UK and Japan, all threaten to undo the positive message from economic data," Mitul Kotecha, head of global FX strategy at Credit Agricole said in a note to clients. The immediate attention remains on Greece and growing scepticism about Greece's ability to carry out austerity measures in the face of rising domestic opposition, Kotecha said. In Athens, striking public workers challenged Greece's bailout-for-austerity deal, starting a 48-hour national strike that shut down ministries, tax offices, schools, hospitals and public services. |
| Posted by:Fred |
| #6 I think Varney might have been referring to leftwing nuts running around firebombing banks. The USA has a tradition of rather more robust police action, rather than fewer leftwing nuts. |
| Posted by: phil_b 2010-05-06 18:26 |
| #5 Everything our Government has done was simply painting over rotten wood. Yes it can happen here and is more likely to happen the more we operate like Europe. China is the one to watch. I call them a paper tiger. They have toxic assets (female donkeys) much worse than what we had or have. I have been concerned about our economy for some time now but it seems most people believe our government- that things are improving. So as long as the cool aid drinkers spend then things aren't so bad as they could be. |
| Posted by: Dale 2010-05-06 15:33 |
| #4 "Risk aversion lifted the dollar up ..." I'd like to point out that when I made this prediction a couple weeks ago all I got was criticism. |
| Posted by: flash91 2010-05-06 12:34 |
| #3 because there is not a such a tradition here. I don't share the same view. I don't share the view either. The USA has its own version of the Free Lunch Party, which essentially denies that bills-have-to-be-paid-or-else. |
| Posted by: Anguper Hupomosing9418 2010-05-06 11:03 |
| #2 I heard financial commentator, Stuart Varney, this morning say that what is going on in Greece can't happen in the U.S. because there is not a such a tradition here. I don't share the same view. It could happen here. The economic conditions are very similar. |
| Posted by: JohnQC 2010-05-06 10:43 |
| #1 Another viewpoint of Greek woes: Markets view the EU-IMF package for Greece as a politically-shaped response that cannot work because it shuts off the twin cures of debt restructuring and devaluation, leaving the burden of adjustment on the Greek people. If Greeks come to view the plan as a rescue for foreign banks and funds – as many already do – there is no chance of carrying the nation through five years of harsh austerity. |
| Posted by: Anguper Hupomosing9418 2010-05-06 00:21 |