Euro is struggling today, especially against the US dollar, thanks in large part to the recent developments in the credit market, and due to more trouble in Italy. Concerns about what’s next for the eurozone are once again asserting themselves, and that is putting some pressure on the euro.
The latest European Central Bank figures on lending indicate that it is dropping. Lending to businesses and households dropped by a record amount in August. Private sector loans dropped by 2 per cent year-over-year in August. This news prompted concerns about the credit market in the eurozone. Worries about lending could prompt the ECB to cut its rate again, and that might result in a weaker euro, particularly against the US dollar.
Also not helping the situation in the eurozone is the latest out of Italy. Once again, Silvio Berlusconi is the focus, and a battle over his Senate seat is underway. With instability threatening Italy, it’s little surprise that attention is, again, being paid to what’s happening in the periphery, and it’s not a very pretty picture.
At 14:21 GMT EUR/USD is down to 1.3490 from the open at 1.3526. EUR/GBP has managed to hold on to gains, though, raising slightly to 0.8424 from the open at 0.8412. EUR/JPY is also higher, moving to 133.6535 from the open at 133.1325.
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