Foreword : Currency War or simply country debts out of control?
Manfred WiebogenPresident ACI, The Financial Mark
'Sovereign downgrade could hit eurozone lenders' was a headline in
the Financial Times which I recently read on my flight back from a
Bucharest meeting with local traders and representatives from the
BNR the National Bank of Romania. Standard & Poor had warned in
this edition that it was looking to downgrade fifteen Eurozone
countrys sovereign debt! Having just re-rated 37 global banks a
week ago, whereby seventeen of them subsequently became downgraded,
this outlook was the next shock to the financial markets in
particular to the Eurozone. Such announcements are certainly
nurturing volatility in all market segments, including Foreign
Exchange. But is there any reason or pattern behind them?
The past years disclosed those countries with more
deficit than surplus. The UK and the US are
known for borrowing from the rest of the world representing the
deficit countries whilst it can be said that China, Japan, other
Asian and emerging countries are known for the opposite. And what
of the Eurozone? Well, in overall, figures show a balance between
exports and imports within the zone. Germany and some others are
known for running surplus, whilst countries mainly in the
southern periphery like Spain and Greece run deficits.
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