ForexSpace.com - Forex news sees European markets open for business this morning very much in a Friday-ish mood for a third consecutive session of losses, sliding in the first half hour of trading. Uppermost in most players’ minds – traders and top forex brokers alike – this coming weekend's IMF meeting, despite suggestions that its $400bn fundraising target was in sight, is nonetheless giving rise to a touch of end-of-week heebie-jeebies.

The IMF has warned that the euro zone’s debt crisis presents the gravest risk to the global economic expansion, and financial markets worry that Spain and Italy may next require bailouts, following Greece, Ireland and Portugal. Enlarging the IMF’s coffers could offer comfort to nervous investors that any widening of the crisis could be contained. IMF head, Christine Lagarde insists she expects to seal a deal on fresh funds at the World Bank/IMF meetings this weekend.

Despite a welcome intervention from a number of major emerging powers, announcing they stood ready to pledge money to bolster the Fund’s crisis-fighting war chest, Brazil says it would be holding out for promises that its voting power at the global lender would increase. "What we want and demand in every meeting is that this commitment be reaffirmed," Guido Mantega, Brazil’s FinMin said yesterday.

Commenting on the situation, Markus Huber, head of German high net worth trading at ETX Capital, said if Brazil really digs its heels, “I don't think the market will be too kind to it. There has to be unity, that's they only way investors think the crisis can be contained.”

Thus it looks as though the IMF will get the cash input it needs; the new European emergency fund now

has €800bn. Even though the cash is not specifically designed for Europe, the European debt crisis is now the biggest threat to the world economy. So the IMF’s focus will surely be squarely on this over the weekend; it's a lot of money we are talking about, enough – one hopes – to keep the likes of Italy and Spain within the single currency bloc’s fold.

From a forex news aspect, the euro has continued to trade in the 1.30 – 1.32 range against the greenback as investors look for guidance on the next direction of the market from today’s Spanish bond auction of 2 and 10 year debt. Yesterday we saw an early USD rally following a much worse than expected Current Account figure of -€1.3bln – compounded by comments from ECB policy maker Weidmann, who stated there was no reason for them to discuss further LTRO’s as it was not their job to solve Spain’s problems. With the successful Spanish debt auction failing to move the euro much, we could see it continue in the range until the end of the week.

Drew Hillier. Editor