Forex News and Rumors – Afternoon Update

Euro to Benefit From Rising Stock Markets

According to an analyst specializing in European markets, the euro stands to gain the most from rising stock markets.

“The ups and downs on the equity markets are still closely correlated with movements in the euro-dollar exchange rate,” Ralf Umlauf, head of floor research at Helaba, said in a note today. “The correlation has even increased slightly recently. To this extent, especially in the current phase of economic stabilization, the euro is likely to be supported by the initial reduction of risk aversion.” More

California Forced to Issue “IOUs”

Already facing a $24 billion USD budget shortfall, California’s Senators failed to vote in a budget in time for the start of the state’s new fiscal year. With tax revenues already on the decline, lawmakers continue to wrangle over cuts to social programs versus an increase in taxes; meanwhile California will issue “IOU” promissory notes to cover payments owed. More

US Diesel Supplies at 16-Year High

US diesel stockpiles – the fuel used by heavy trucks and construction equipment – rose 28 percent in the past six months as demand for diesel fuel continues to fall.

“Inventories are bloated,” said Tavio Headley, an economist with the American Trucking Associations in Arlington, Virginia. “Businesses are not taking many new deliveries, and that has a huge effect on tonnage volumes. The significant drop in tonnage volumes is also having a huge impact on domestic diesel demand.” More

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