Fear of Budget Shortage Strangles Euro
Posted by POFME.com on April 23rd,
2010
The euro sank today to almost the lowest level
in a year against the U.S. dollar as the possibility
that Greece will be forced to activate the rescue
package increased after the announcement that
the Greece’s deficit the last year was higher than
previously estimated.
After the meeting of the European leaders with
their Greek counterparts, which was held to discuss
the proposed bailout, the report showed that
the nation’s budget shortage was 13.6 percent
of gross domestic product in 2009, higher than
previously estimated. The Greece’s government may
delay or cut payments to bond investors during
the negotiations about the terms of the bailout.
The growing concern about the Greece’s budget
deficit and worries that other European countries
will experience the same problem drives the euro
these days. Until the European Union’s government
find the way to lessen these fears the euro will
remain inherently weak.
EUR/USD traded near 1.3298 as of 16:07 GMT today,
falling from its opening level of 1.3389. EUR/JPY
traded at 123.77 after it opened at 124.76.
If you want to comment on the Euro’s recent
action or have any questions regarding this
currency, please, feel free to reply below.
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