The euro has fallen further this morning as a result of the European Union’s failure to establish a solid rescue plan for bailing out Greece.
In addition to this, figures show that Germany’s economic recovery unexpectedly stalled in the final quarter of 2009. Although there were hopes that the EU would be ready to rescue Greece right away, these hopes were dampened by German chancellor Angela Merkel, who stated that the EU will provide "determined and coordinated action if needed."
Kasper Kirkegaard at Danske said that traders would prefer some concrete news on the bail-out, stating, "the EU's intentions are good, but the market would like details.”
The foreign exchange rate of the euro currency against the dollar is now nearing an eight-month low. It fell a further 0.5 per cent this morning to $1.3606. It also fell against the pound to £1.1461.
BGC Partners’ David Bulk said all is not yet lost for the single European currency, but that the weaker economies in the eurozone are dragging down its value. He explained, “the euro has fallen, but not exactly out of bed, though there is little appetite for support. The situation will inevitably be exacerbated by Spain's, Portugal's and Ireland's problems.”
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