The single European currency declined with a rather strong gap against the U.S. dollar and the Japanese yen today as the leaders of the developed Eurozone countries said that the Eastern European banks will not receive any financial aid.
The bank-devastating crisis is pressing hard on the European countries that havent adopted the euro yet, pushing down their currencies. The banks face significant risks as the national currencies fall against the dollar and the euro. Unfortunately for them, the European Union seems to be too slow in taking any unified measures to counter the crisis.
The euro dropped for the second day against the U.S. dollar and the Japanese yen, but rose against the British pound today. The traders favored the «safe» currencies as the stocks dropped worldwide and the appetites for risk declined even deeper. €180 billion ($227 billion) plan to help the Eastern European banks was vetoed by the European Union leaders today.
The analysts believe that only cooperative effort of the EU countries can stop the euro from falling after adding some confidence into the financial system of the regional economies. The local efforts of the separate countries can do little to save the banks from collapsing and the euro from the mass-sale for the dollar and the yen.
EUR/USD fell from 1.2618 to 1.2603 as of 10:18 GMT today after reaching as low as 1.2544 and opening with a significant weekly gap from the Fridays close level at 1.2667. EUR/JPY declined from 123.18 to 122.50, while EUR/GBP rose from 0.8838 to 0.8870 today.
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