The euro declined today on concerns that measures planned by the European leaders on the summit yesterday wouldn’t be enough to contain the
The European lawmakers agreed to provide additional aid for Greece, expand the Eurozone bailout fund and allow to use it for purchasing bonds of indebted nations. Forex traders are worried, though, that such measures won’t be enough to deal with the crisis in the long run.
The EU leaders said in the statement:
Since the beginning of the sovereign debt crisis, important measures have been taken to stabilize the euro area, reform the rules and develop new stabilization tools. The recovery in the euro area is well on track and the euro is based on sound economic fundamentals. But the challenges at hand have shown the need for more far reaching measures.
Fitch Ratings commented today on the outcome of the summit:
The commitments agreed by euro area Heads of State represent an important and positive step towards securing financial stability in the euro zone. Fitch considers the nature of private sector involvement in a new financial programme of support for Greece to constitute a Restricted Default event. However, the reduction in interest rates and extension of maturities potentially offers Greece a window of opportunity to regain solvency, despite the formidable challenges that it faces.
EUR/USD dropped from 1.4423 to 1.4364 as of 19:25 GMT today after it reached the intraday low of 1.4323. EUR/JPY fell from 112.94 to 112.69.
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