Greece’s request for emergency aid looked to stem the flow of selling as Finance minister Papaconstantinou warned investors they will “lose their shirts” if they bet the cash strapped nation will default. The debt saddled country has announced billions of euros in austerity measures, including tax hikes and public sector wage cuts.

The Euro has been trading back above 1.16 against Sterling while Euro/dollar has fallen below 1.33.

Friday’s UK data proved negative for the Pound as we discovered the economy grew at half the pace economists predicted in the first three months of the year. The office for National Statistics reported that GDP grew by 0.2% in Q1 2010 against the 0.4% analysts had expected.

The focus in the UK will be on the final weeks of the election campaign and the possible outcomes that may emerge as polling day draws closer. Leader of the Lib Dems, Nick Clegg, has warned current PM Gordon Brown not to expect a coalition with his party, though a tie up with the Conservatives also looks unlikely.

The Dollar advanced to a two week high against the Yen as government reports showed US new home sales rose in March by the most in almost five decades and orders for durable goods surged. Bookings for US durable goods excluding transportation items advanced 2.8 percent last month after a 1.7 percent gain in February.

The Fed hinted that is could keep interest rates at historic lows for longer than the market currently expects (at the moment traders expect a rise in interest rates in September) but was deliberately ambiguous (shock!) in the term “extended period”.

Persistently high unemployment and renewed housing market weakness was highlighted as cause for particular concern and the Fed seem cautious on the US economic outlook. However, currencies reflect relative strength and we still believe the recovery is continuing faster stateside than in Britain or the Euro-zone and so continued dollar strength seems likely to stay in the short term.

Greece continues to make the front pages – yesterday there were rumours that the Hellenic Republic had tried to renegotiate the rescue package put together by Eurozone countries, sending the spread between German and Greek government bonds wider and pushing up borrowing costs.

The Euro fell against Sterling and the Dollar and further uncertainty regarding future Greek government borrowing weighs heavily on the Euro. With around €20 Billion to refinanced in May alone this story will continue to keep the Euro pairs volatile.

Gordon Brown’s announcement of the general election on May 6 saw a slight dip in Sterling but it recovered well and now trades at just under 1.14 against the Euro and 1.52 against the Dollar. As the major parties started on the election trail, the markets continue to favour a majority victory over a hung parliament.

However, the size of the swing required for a Conservative victory and possible small majority that results has led some commentators to suggest that a coalition government with a larger majority may be preferable to and be able to better make the tough economic and political decisions that lay ahead for Britain.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

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The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.