Euro Suffers on Single Currency Crisis Speculations

The euro lost today versus most of main traded currencies as rising budget deficits in some Eurozone member countries is shunning investors from the region, as well as speculations suggesting that Greece would leave the single currency affected market sentiment in the Euro area.

The euro had its sharpest gains versus the Swiss franc today as leading indicators in the alpine country rose for another month consecutively, evidencing the strength and resilience of the Swiss economy, bringing investors to the safety provided by franc-priced assets. The greenback ranked also among the biggest winners versus the euro as a quarterly gross domestic report published today in the U.S. came above expectations, causing an exodus of capital from the Eurozone towards the optimistic equities markets in the United States. The euro outlook has declined further after specialists speculated that Greece and other countries with growing budget deficits may even leave the Eurozone, statements which were considered absurd by the ECB.

The economic recovery which allowed the euro to trade high during most of 2009 has faded out in the beginning of this year, and the growing budget deficits of some Eurozone members is creating a strong pessimistic sentiment towards the euro, which may lose further versus multiple currencies in the short-term.

EUR/USD traded at 1.3897 as of 16:19 GMT from a previous rate of 1.3974 yesterday. EUR/CHF traded at 1.4656 from 1.4709.

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