Euro is retaining its lead against major counterparts today, even though there are concerns about the eurozone economy. Economic news in other major economies has also been lackluster, so the euro has managed to retain some of its strength.
Even though the euro is holding its ground, there are still plenty of concerns for the future. Recession is threatening the eurozone as economic data continues to disappoint. The latest report on unemployment paints a rather bleak picture in the eurozone, with a rate at 12.1 per cent.
Even Germany can’t keep the eurozone going anymore. Even though German unemployment remains relatively low at 5.4 per cent, the fact of the matter is that periphery countries have much higher unemployment — including Spain with its 26.7 per cent unemployment rate.
So far, the euro has managed to maintain some of its strength based on the fact that the ECB has yet to let the interest rate fall below 0.75 per cent. Plus, the other major currencies are all weakened by quantitative easing, which is something the ECB hasn’t resorted to yet.
But things could change as the situation becomes more dire in the eurozone. Already, there is speculation that the ECB will cut the rate to 0.50 per cent later this week.
At 15:56 GMT EUR/USD is up to 1.3166 from the open at 1.3099. EUR/GBP is up to 0.8465 from the open at 0.8451. EUR/JPY is up to 128.3445 from the open at 128.0630.
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