Euro Pulls Back as OECD Talks about Firewall Needs

Earlier today, euro got a boost from what many saw as a successful Italian bond sale, as well as yesterday’s speech from Ben Bernanke opening the door for QE3 in the United States. However, the euro is pulling back right now as the situation changes a little bit. The OECD said that the eurozone needed a much larger firewall in order to contain the debt crisis. The result of this latest piece of news is that the euro is dropping.

With sale of almost 3 billion euros in bonds, Italy staged a successful sale. The news helped boost the euro to a new high for the month of March. Additionally, the US dollar was undermined against the euro with the help of remarks from Federal Reserve Chair Ben Bernanke indicating that another round of quantitative easing could still be coming up.
Things started turning for the euro, though, when the Organization for Economic Cooperation and Development got involved. Right now, the fire power of the eurozone’s bailout facilities is at around 700 billion euros. The OECD doesn’t feel as though that’s enough. The OECD suggests that 1 trillion euros is needed. The news that the eurozone’s firewall could be inadequate is sending the 17-nation currency down against the greenback right now.
At 13:27 GMT EUR/USD has retreated to 1.3331 from an earlier high of 1.3388 and the open at 1.3359. EUR/GBP is lower at 0.8343, down from the open at 0.8365.

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