Enough risk for 2010

23 November 2010 By Ian Campbell

Korean hostilities add to a growing list of negatives. The twoweek wait till Ireland’s budget vote will be nervy for the euro zone. China is raising reserve requirements. Equities and the euro are showing their vulnerability. As the yearend approaches, investors may step back.

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Reports that North Korea had fired artillery shells at a South Korean island caused the U.S. dollar and U.S. Treasuries to rise on Nov. 23. The U.S. dollar index, which measures its level against a basket of six other major currencies, rose by around 0.4 percent in European morning trading. The euro may also have been affected by comments from Wolfgang Schaeuble, the German finance minister, who said that the common currency was at stake in the Ireland debt crisis.

China increased banks' reserve requirements by 50 basis points on Nov. 19 for the second time in two weeks. Chinese consumer price inflation rose to 4.4 percent in the year to October, well above the government's 3 percent inflation target for this year.

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