Traders once again showed their positive feeling towards the upcoming G20 meeting in Cannes on November 3, with a monster rally in EUR/USD.

The pair pushed up to 1.3699, helped in part by a sense that Europe could actually come up with a solution that will help the banks longer-term. However, the rally was given an extra boost when Reuters reported that the EU/IMF/ECB inspectors are expected to conclude discussions with Greece soon, and may offer a statement on Tuesday. This statement is very interesting, and if the IMF does give the green light to release funds to Greece (for the first bailout), then the euro could get another leg up. The big event tonight though, will arguably be a key vote on the expanded powers of the EFSF in Slovakia. While Slovakia is the second poorest nation in Europe and is effectively only contributing 1% toward the EFSF, its vote is important as they need all 17 member nations to ratify the July 21 agreement.

As it stands, the market is concerned that the vote will fail because one of four members of the ruling coalition is set to vote against it. The vote is expected at 02:00 (Melbourne time), however we expect EUR/USD to come under downside pressure if they do vote against it, and on the premise that the EFSF will not be able to buy periphery bonds in the secondary market (though, it is worth pointing out it can still operate), we are highly likely to see a collapse of the current government. The question is though, given how much time core Europe has put into working the new expanded powers of the EFSF, what will the ramifications be for Slovakia if they upset the balance? There is every chance we could see EUR/USD pullback in Asian trade, however look for a nice rebound if the vote gets the green light.