Despite criticisms from numerous German officials over the past few days about the EU’s proposed joint banking supervision plan, European Commissioner Michel Barnier said today that there is no German resistance. However, Barnier also said that there will be compromises on the supervisor plan, likely referring to his reported negotiations with Germany.
Barnier’s comments sent the Euro above 1.3000 against the US Dollar following an initial boost by abetter than expected UK public sector net borrowing. A 4-month high currently sits at 1.3171, which could provide resistance, and support could be provided by the key 1.3000 figure.
Turning to Greece, German Finance Ministry Spokesman Kotthaus said he doesn’t know when the Troika will submit the new Greece report. However, he said that Greece has had an impressive debt cut. Greek coalition leaders are supposed to agree on 11.5 billion Euros of budget cuts to present to the Troika, and reports were released overnight that the party leaders are closer to agreeing on a plan.
In Italy, Undersecretary of Finance Gianfranco Polillo said that neither Italy nor any other country would preemptively ask for the ECB’s bond purchases. He said that the sovereign debt yields would have to jump for Italy to ask for help. Polillo also said that Italy is looking for 6.5 billion Euros in cuts, in hopes of avoiding a rise in VAT. The budget comment was quickly followed by a 30 point decline in EURUSD.
In England, BoE Governor Mervyn King said that missing deficit targets is acceptable, if the reason is due to a poor economy. Also, BoE’s Dale said the initial signs from the funding for lending scheme are encouraging.
In the North American session, the Canadian CPI will be released at 12:30 GMT. Follow the release with Currency Analyst David Song here.
EURUSD 1-hour: September 21, 2012
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