GBP then EURO rallies come to an abrupt end

Just as the Pound and Euro were fighting back came a mass of bad news to end the brief rallies.
First Sterling which was sold off on BOE Governor King’s dovish comments. Then The German IFO business climate figures and French retail sales which were very disappointing(Weather and the end of car scrappage schemes were blamed).
Just to add to the misery and aid the dollar and Yen even more was the announcement  of US conference board  Consumer Confidence figures, which fell to a 10 month low of 46 against 55 expected.
This led equity markets lower compounding the the Yen and dollar rise.

So where to next?
Well frankly it is difficult to see much to help out the Euro other than it being oversold. There seems to be a real danger of European  countries slipping back into that talked about double dip recession. The difference this time will be that governments are unable to pump more cash in this time. On the contrary many will be having to do the opposite.

I am perfectly prepared to be wrong but a  sell off in equities and  at some point a blood bath in the Bond markets ( triggered by Government debt)  looks to be looming.
Now the US and Japanese have their own problems but the initial moves for both their currencies could be much  stronger.
If this pans out then Gary Shilling´s prediction of parity for Euro Dollar does not look that far fetched
Just to add to the mix the Forex Market hero George Soros believes that the Greek problem is the least of the debt worries for the Euro zone .

If there is any Euro rally on the back of some sort of Greek bail out ,or short term consolidation, it could well be a  precursor to another big down move for Euro dollar.

Playing the short term rally certainly ended in tears today.