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Euro Rebounds on Reports of CB to IMF Proposal

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It appears that authorities across both side of the Atlantic are coming to the conclusion that the central banks to IMF scheme is the most expeditious policy response to the growing credit crisis in the EZ region as it neatly sidesteps many political barriers by providing much needed capital without the need for legislative approval. However, the central banks to IMF plan is rife with problems. The IMF is simply not big enough to provide sustained financing to the Eurozone and the organization's members from the developing world may object to so much aid going to the coffers of developed nations. In short, the IMF financing scheme may turn out to be yet another stop gap measure and is unlikely to pacify European credit markets for long.

With no major economic data on the docket the EUR/USD is likely to remain relatively quiet for the rest of the day in absence of any further macro headlines. The pair has recovered some of the ground lost in Friday's selloff but remains capped at the 1.3500 level as traders await the development of policy responses as the week progresses.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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