The Pound has continued its surge against the Euro with the exchange rate currently standing at 1.213. A lacklustre Franco-German press conference kicked off 2012’s ubiquitous ‘Eurozone debt crisis talks’ and managed to off-set some strong economic data released earlier this morning in Germany.
The German budget surplus remained positive and continued to grow in November; despite chaos all around it, the German economy managed to keep its head and trudge on efficiently. The Current Account N.S.A figures increased by €4.3 billion to €14.3 billion and the German Trade Balance improved from €12.5 billion to €15.1 billion. German exports benefitted from a weak Euro exchange rate that tempted businesses into investing in German goods – foreign investors extended profits through the favourable currency rates on offer.
The main outcomes of the meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel were uninspiring to say the least:
Merkel warned Greece that the country would not receive its next aid package unless it agreed terms with the private sector lenders very soon – something Papademos publicly stated last week.
The EU fiscal compact is purportedly ready to be signed on March 1st and possibly even as soon as January 30th – these measures were deemed unsubstantial last month by investors and with nothing new to wet their whistles it seems likely the compact will be treated with the same disdain this time around.
France and Germany reiterated their desire to implement a new financial transaction tax – however UK Prime Minister David Cameron has re-stated his absolute objection to the tax, speaking out to the press yesterday.
The talks ended characteristically inconclusive and the markets reacted predictably pragmatic; the Pound maintained its strong value against the Euro and made slight gains against the US Dollar on the back of a minor shift in market sentiment as the Buck appears to be overbought in the near-term.
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