Weekly Forex Update. Goldman Sacked?

Sentiment change swings market back.

After last weekends announcements on Greece and the knee jerk positive move for the Euro things fizzled out and then reversed.

Firstly after initial improvements in Greek bonds and a stronger Euro the market fully digested the continued lack of clarity and reversed both gains.

Fridays shock announcement that the SEC was prosecuting Goldman Sachs for fraud in connection with sales of Mortgage Backed Securities pushed equities lower and led to further strength of the dollar and particularly the Yen
The much known risk averse play kicked in for the first time in some while leaving the Japanese Yen some 2% stronger against the Aust$ and NZ$ and 1% against the US dollar.
The EUR/USD finished much the same as last week at 1.35 having touched almost 1.37 at the beginning of the week.

It remains to be seen if the Goldman issue was merely the catalyst for a perhaps overdue technical correction for equities or whether the markets will shrug this off next week and return to a more positive mood.
It does, however seem likely that the Forex markets will take there lead from equities this week especially as far as the YEN is concerned.

With regard to the Greece situation,the swiftness of the bond markets reaction does not bode well for a happy ending on this story. Furthermore talk of a legal challenge in Germany will only add to what is becoming a really serious threat to the Euro area. Even with IMF and Euro money it appears that the markets remain unconvinced that these measure will prove anything more than a temporary solution to the problems in Greece.However much the Euro area old guard rally around with positive statements about unity and support there really is a growing feeling that the end game could be very different, all be that a while off.

Sterling and the Gilt market seem to have once again escaped unscathed for the week dispite the opinion polls pointing ever more so to a hung parliament. They surely have to have a wobble soon.

Back in the real world most of Northern Europe continues to be stuck without air travel , do I hear a bid for airline shares on Monday.