EUROZONE: Credit Suisse FX strategists say the two-day European Union
summit meeting that begins Thursday, will be the market focus this week.
“The EU’s attempts on maintaining ‘constructive ambiguity’ with respect
to its strategy for aiding Greece are breaking down, largely because
Greece wants to reduce its borrowing costs faster than this strategy
would allow and because Germany remains deeply reluctant to provide
fiscal support apart from in genuine distress,” they say. This week’s
outcome will be key for euro direction. “We think the euro needs a
concrete pledge of support from the EU, perhaps in partnership with the
IMF, to avoid a test of new lows for the year below $1.3436 in the
euro,” Credit Suisse says. Traders point to comments by German
Chancellor Merkel, who said in a Deutschlandradio interview, aired
Sunday, that a bailout would not be on the agenda.