Euro Struggles as France and Germany Try to Reconcile

One of the issues facing the future of the eurozone is the differences in opinion between France and Germany. Since the beginning, the two countries have had different approaches to the monetary union. And, unless those differences can be reconciled, real progress can’t be made in the eurozone.

Questions of whether to share debts amongst eurozone states, whether to force individual states to follow stricter guidelines, and a number of other issues continue to divide the two biggest economies in the eurozone. Unless some answers can be found — and reasonable policies pursued — the euro remains in danger.
Today, the euro is lower on the Forex market, retreating as the wrangling continues. Additionally, Forex traders are watching S&P. The ratings agency could be on the verge of downgrading 15 of the 17 countries in the eurozone. That would be a huge blow to the euro, and cause serious problems worldwide.
So, as risk appetite fades, and yesterday’s eurozone optimism melts away, the euro falls. The euro is higher against the UK pound, though. The inception of a sterling liquidity facility is resulting in the pound being cheaper, and that is providing the euro one of its very few areas of success today.
At 16:24 GMT, EUR/USD is lower at 1.3384, down from the open at 1.3398. EUR/JPY is lower at 104.0810, off the open at 104.2900. EUR/GBP is slightly higher at 0.8581, up from the open at 0.8560.

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