Euro is receiving a bit of a boost right now, inching higher as risk appetite attempts an appearance. However, the feeble gains this morning aren’t expected to last too long. Already, rumors that the euro might really be on its last legs are circulating as Germany balks at approving the latest incarnation of the European Stability Mechanism.
Rather than simply rubber-stamping the latest changes to the eurozone’s bailout fund, the German Constitutional Court has instead launched a look at its legality in light of German law. This could lead to months more of wrangling and negotiation. In the meantime, it seems clear that efforts by the European Central Bank to prop up the eurozone economy aren’t going to work in the long run.
Even after rate cuts, and pumping billions of euros into the system, periphery economies continues to struggle, and the eurozone economy as a whole remains stubbornly on the path to recession. Concerns about what’s next for the eurozone as the euro’s trendline continues to move fitfully lower are starting to take over.
While there is still plenty of hope for the 17-nation currency, European leaders need to show that they are ready to implement long-term solutions, rather than constantly falling back on short-term stop-gap solutions.
At 13:25 GMT EUR/USD is a little higher at 1.2257, up from the open at 1.2250. EUR/GBP is down to 0.7874 from the open at 0.7894. EUR/JPY is down to 97.1000 from the open at 97.2990.
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