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By Peter Stevenson MEMBERS of Volunteer Doctors Cyprus have treated around 350 people at their free clinic in Nicosia since it opened three months ago, while two more, one in Paphos and one in Polis are due to open today. Limassol also has a free clinic, which was opened only last month, and plans have been drawn ...
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SOME 10 days ago, foreign minister Ioannis Kasoulides raised expectations by announcing the possibility of a deal with Turkey for the opening of the fenced off area of Famagusta, for the return of its inhabitants. In exchange the Cyprus government would agree to the opening of Tymbou airport to direct flights. ...
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By George Psyllides PRIVATE auditors have expressed doubt the electricity authority (EAC) could be considered a going concern and have asked its board to draft a credible plan to tackle the problem, according to the auditor-general’s 2012 report on the semi-state company. Among other issues, ...
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Cyprus Internet Directory [ Fiscal worries drive euro lower; stocks slip ]

Fiscal worries drive euro lower; stocks slip

Fiscal worries drive euro lower; stocks slip
February 04, 2010 - Reuters

The euro hit a seven-month low against the dollar on Thursday as concerns intensified that Greece's fiscal problems would spread to other highly-indebted euro zone countries, while European stocks followed Asia lower.

Investors are looking to monetary policy decisions by the Bank of England and the European Central Bank. The BoE looks set to halt its government bond buying programme, taking the first step towards normalising policy, but both of them are expected to emphasise that interest rates would stay low for some time.

The premium investors demand to hold government debt issued by peripheral countries such as Greece, Portugal and Spain rather than benchmark German bunds rose again. The cost of insuring Portuguese debt against default hit a record high.

The euro zone is dealing with a most severe debt crisis and the European Union said Greek plans to cut the budget gap from 12.7 percent of gross domestic product in 2009 to below 3 percent in 2012 would not be easy to implement.

Investors are waiting for ECB President Jean-Claude Trichet, who is due to speak at 1330 GMT.

"The market will be closely watching any comments Trichet has to make on the fiscal situation in the euro zone which could lead to volatility in the currency." said Lauren Rosborough, currency analyst at Westpac.

The euro fell around 0.4 percent on the day to $1.3831, its lowest since early July.

The 10-year Portuguese/German government bond yield spread widened nine basis points on the day to 154 basis points. The equivalent Greek spread widened 12 basis points to 360 bps while the Spanish spread edged out to 93 bps from 91 bps.

Portugal added to investor jitters on Wednesday after it cut its planned T-bill placement because yields spiked from January's placement on Greek concerns.

Portuguese five-year credit default swaps hit a record high of 216 basis points from 196.2 bps late on Wednesday. This means it costs 216,000 euros per 10 million euros of exposure. Greek and Spanish five-year CDS also rose.

"This highlights how the issue of fiscal problems in EMU is spreading and will continue to provide a negative backdrop for the euro," BNP Paribas said in a note to clients.

"Renewed pressure on spreads in EMU will keep euro/dollar under pressure and the prospect of a break to new lows has increased." MSCI world equity index fell 0.4 percent while the FTSEurofirst 300 index lost 0.3 percent. Shell fell more than 2 percent after it posted a 75 percent fall in fourth-quarter profits to $1.18 billion due to falling output.

Japanese stocks fell 0.5 percent with Toyota Motor sliding further on its recall woes.

Emerging stocks dropped 0.8 percent.

U.S. crude oil fell 0.6 percent to $76.53.

The bund futures were steady.

The dollar rose a quarter percent against a basket of major currencies.

(Source: Financial Mirror,

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