By FX Empire.com
Financial markets are fluctuating today ahead of the crucial European summit held in Brussels. Investors await concrete decisions that could be decisive for the future of the euro area and even the entire global financial system.
Ending the debt crisis and providing protection forItalyandSpainand other economies in the region is very important to restore confidence in the financial markets, therefore the whole world has their eyes focused on Europe today.
European leaders are debating on the mechanism to aid Greece and establish the hair-cut on the Greek bonds which could reach to 60%, expanding the EFSF from 440 billion Euros to over 1 trillion, and convince banks to recapitalize.
Uncertainty and fears ahead of the summit are causing fluctuations, yet after the European finance ministers canceled their meeting ahead of the summit, markets believed that leaders found common grounds, so there was no need for it.
Tight ranges are still seen within the currency markets today, especially since Europe and UK lack the important economic data, while the US will release only later in the day its durable goods orders and the new home sales.
Fluctuations are seen in the equity markets as well. After suffering losses in the morning, the Asian stocks managed to rise after confidence was restored when the Chinese Premier signaled “simulative policies” to support small companies.
In Europe stocks are almost unchanged where the FTSE 100 rose as of this writing by 0.02%, DAX fell 0.07% and CAC 40 rose 0.17%. In Asia Nikkei 225 fell 0.16% while Hang Seng rose 0.52%.
The euro rose slightly to 1.3940 as of this writing while the pound is almost unchanged at 1.6000. The dollar index fell slightly to 76.05 while the yen is near a record high at 75.85 as worries increase demand on this safe haven asset.
The comments made by Chinese Premier Wen Jiabao managed to support the commodities markets today, where crude oil continues to trade above the $93.50 per barrel level while gold is trading at $1713.90 per ounce level.
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