Euro Two Month Low as Debt in Portugal Bites

  • 14 years ago
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Euro at a low as debt crisis continues

Euro uncertainty continues as the Irish rescue package hangs in the balance pending the December 7th budget with a Portuguese bond auction due today. Yesterday ratings agency Standard and Poor’s put Portugal on credit watch with the need for rescue funds thought increasingly likely. Yesterday the Euro was trading at a two month low against the Pound, however, it has been gaining ground so far today, with some suggesting that the European Central Bank will reveal moves to increase support measures that had been in the process of being withdrawn.

Euro – European Markets

As the European debt crisis deepens and having fallen to a two month low against the Pound, the Euro has been gaining so far today with some raising their expectations that the European Central Bank will make their commitment clear to increasing support measures. It is thought the European Central Bank may be forced to reverse its recent policy of withdrawing support measures and instead take a move such as large-scale bond purchasing as hinted at by Trichet yesterday.

The potential move comes on the same day as a Portuguese bond auction in which the Government are due to auction 500 million Euros of bonds. This will be closely watched by markets to interpret the level of interest in the nation widely earmarked as the next to require bail-out funds, with Standard and Poor’s yesterday placing the nation on credit watch.

Strong German retail figures have been released today showing 2.3 percent growth for October, far above the predicted 1.2 percent. At the moment however, strong economic growth data from Germany can do little alone to help the Euro, when the contrasts in the strength of the various nations is one of the key problems emerging.

source: Currency Solutions

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