Even though the euro is logging gains against its major counterparts today, the Bundesbank sees trouble ahead for the 17-nation currency. Unconvinced that the eurozone crisis is over, Germany’s central bank is stockpiling billions in order to get through what it thinks is more difficult as the sovereign debt crisis continues.
The head of Germany’s central bank, Jens Weidmann, thinks that reforms are needed in order to get the eurozone back on track, and he also thinks that the ECB is going about things in the wrong way, and that the eurozone’s central bank is exposed to too much risk.
Calling out France, Italy, and Cyprus, Weidmann is uncertain that the eurozone really is moving toward firmer footing, and he sees trouble ahead for the 17-nation currency. Even though the euro is holding steady right now, there are some hurdles to clear.
The eurozone is still struggling with recession. On top of that, the wider global economy is not likely to be much help. The latest Chinese data was disappointing, and wrangling in the United States over the budget sequester threatens to destroy any progress made by the world’s largest economy.
At 14:38 GMT EUR/USD is up to 1.3059 from the open at 1.3047. EUR/GBP is up to 0.8779 from the open at 0.8745. EUR/JPY is down to 125.6635 from the open at 125.6705.
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