Investors are Pessimistic About EU Economy, Causing Euro to Fall

The euro extended its slump today for the fourth day as Jean-Claude Trichet, the President of the European Central Bank, announced that the buying of the government bonds wasn’t discussed at the ECB meeting today.

The ECB kept its benchmark interest rate at the record low 1 percent. Trichet said: “We call for decisive actions by governments to achieving a lasting and credible consolidation of public finances”. He claimed that European economy was slowed in the first quarter of this year by the harsh winter and should strengthen in the spring. He also tried to convince that Greece’s fiscal crisis isn’t spreading to other countries.

Most economists remained unconvinced though. Moody’s showed in today’s report that the debt crisis threatens such countries as the U.K., Spain, Portugal, Italy, and Ireland; the agency explained:

Each of these countries’ banking systems faces different challenges of different magnitudes, but warns that contagion risk could dilute these differences and impose very real, common threats on all of them.

EUR/USD trade at about 1.2621 today as of 22:48 GMT after it opened at 1.2813. EUR/JPY traded near 114.33 down from the opening level of 120.22.

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