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QE3 Looks Up To Germany: Song Kong &Nbsp;

2012/3/27 20:57:00 20

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Under the influence of this cold and hot fundamentals, non US currencies broke through against the US dollar yesterday.

Euro exchange

dollar

Refresh 3 weeks and a half high point 1.3366, and also completed 4 hours map level head and shoulders neck necking breakthrough; sterling with the US dollar refresh 3 weeks high 1.5973, completed the 200 day moving average effective breakthrough, US dollar and Swiss francs refresh 3 week low 0.9021.

Euro zone finance ministers will meet in Copenhagen, Denmark on 30-31 March. Raising the euro zone's "firewall" will be an important topic of the conference.

Eurozone leaders set up two rescue funds after the debt crisis. The permanent European stability mechanism (ESM) was originally intended to replace the temporary European financial stability fund (EFSF) in July.

For enlarging Europe

firewall

There are three options discussed at present. The first plan is that the merger of 440 billion EFSF and 500 billion euro ESM into 940 billion euros will be the most convincing and effective way to raise the euro zone firewall. The second plan is to raise the upper limit of ESM from 500 billion euros to about 700 billion euros; the third option is to put the euro around $240 billion of EFSF into ESM.

So ESM can reach 740 billion euros.

In his speech in March 26th, Merkel pointed out that Germany could allow temporary EFSF funds to run in parallel with the permanent ESM fund.

The parallel operation of the two funds actually expanded the scale of ESM in disguise, although Germany continued to oppose the direct expansion of the ESM scale.

This weekend

Eurozone

The finance ministers' meeting will discuss how to enhance the "firewall" problem. Merkel's position undoubtedly increased the confidence of the market.

After Merkel's speech, the euro reversed other risky currencies from the low position.

Delaki (Mario Draghi), President of the European Central Bank (ECB), said on Monday (March 26th) that the outlook for the euro area economy has improved, and that overall economic activity and financial markets have shown signs of stabilization.

An optimistic assessment of the economy has also provided support for the rising of non US currencies such as the euro.