Euro Slides on Stocks Regional Drop

The European market outlook continued to grow pessimistic today as equities dropped in the region forced by raising concerns that economic stimulus will be lifted in the region, and uncertainties regarding the region’s financial stability affected the appeal for the Euroland’s single currency.

Shares in the banking sector led the fall of most stock markets in the Eurozone, as specially southern European nations with massive budget deficits like Greece and Spain are affecting the attractiveness for the euro in foreign-exchange markets. Germany’s preliminary monthly consumer prices published today posted a bigger-than-expected retraction for Eurozone’s wealthier country inflation, fact which also added to the already negative sentiment towards assets in the region, forcing the euro down versus the pound, despite a pessimist report published in the U.K. today.

The euro started the year with a much more pessimistic outlook than it had during the majority of 2009 as Greece budget deficit was the first event to impact the currency’s attractiveness in 2010. Until the end of the last year, only Eastern European nationals which do not use the single currency needed a bail out to save them from collapse, but now, as some Eurozone members may need loans to adjust their public accounts, the euro is falling consistently.

EUR/USD traded at 1.4036 as of 18:03 GMT from a previous rate of 1.4077 yesterday. EUR/GBP traded at 0.8671 from 0.8725.

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