China To The Rescue Again – What Next For EURUSD?

Here we are again. With global markets in the red and fears of a European financial meltdown, Beijing officials may be coming to the rescue of troubled nations once again. This time it's Italy. After further declines in the EURUSD exchange rate on Monday morning, it was announced that the world's largest sovereign wealth fund, the China Investment Corp., was interested in making significant investments in Italian bonds and publicly owned companies. The news carries a lot of weight. Why? As it stands, market estimates pit Chinese investments in the country at a paltry 4% – which means that they could have a long way to go when it comes to buying up high yielding Italian debt. Italian 10-year bonds yielded 5.6% at the last auction, with investors pricing 1-year bills at almost 1.5 times last month's cost of almost 3%. Read the article here - http://forexalliance.com/2011/09/china-rescue-eurusd/