The Euro is ready to face another big fall in value as European Central Bank President Mario Draghi disclosed he fears recent currency gains may put a damper on efforts to control inflation and inject growth.
The single currency – in use in 17 countries – is trading 0.3% against the US Dollar as European leaders thrash out the 2014-2020 budget at a Belgium summit.
British Prime Minister David Cameron seems to have won a notable victory by persuading other leaders to cut the budget by £30 billion – the first cut ever.
Despite desperate adversity from French President Francois Hollande, Germany swayed the debate by backing Britain.
The deal saves Britain £500 million a year in European Union payments and subsidies for other countries.
Hollande also lost in calls to control the Euro exchange rate as Draghi and German Chancellor Angela Merkel rounded against him.
Perhaps Britain is about to come in from the cold as France becomes the new European Union scapegoat.
Land of the rising yen
The Japanese yen is rising after the nation’s finance minister hinted that efforts to weaken the currency were a step too far.
Speculators believe the Bank of Japan may soon ease policy with a view to strengthening the currency.
However, any gains are likely to be short-lived as recent balance of payments postings show the country’s finances are not improving – the figures showed Japan was in the red for two straight months for the first time since 1985.
Moscow links with Eurasia banks
Banks in Belarus, Kazakhstan, Kyrgyzstan and Tajikistan now have unrestricted access to The Moscow Exchange.
Russia and the four countries are constructing a Eurasian Economic Community.
They can all trade on Russia’s bourse currency exchange without a licence, join the clearing system and have direct market access.
The link is finalises the long-discussed Integrated Currency Market of the Eurasian Economic Community.
Behind-the-scenes are plans in Moscow to switch the rouble in to a convertible currency to lessen dependency against the US Dollar
Rupee under pressure
The Indian rupee has slumped after official economic growth projections look like coming in worse than expected. Analysts are worried about how the country will fund fiscal and current account deficits.
The government confirms the country’s slowest growth in 10 years could fall short of earlier projections. Preliminary data shows the economy has grown 5% in the fiscal year ending next month.
Tax reforms and austerity measures may be brought forward to boost government income and boost growth.