Euro Continues to Fall as Hopes of Summit Solution Fails

By ForexBrokers · Filed Under News Leave a Comment 

The European crisis is seemingly worsening as the Euro continued to fall against the United States’ Dollar. On June 25, it slipped almost to a two-week low. Investors had more grim news as they predicted that the fall will continue, even though a European Summit has been convened to find some solution to the ongoing crisis. Investors were of the opinion that the summit will fail to find any feasible solution to arrest the fall of Euro against the US dollar and hence, the debt-crisis will also worsen.

Yen Rises by Almost 2% Against The Euro

Due to this fall, investors diverted the investments to safer options, contributing to the rise of the Dollar value. An unexpected benefactor of this strategy was the Yen. The day saw the Yen jump by almost 2% against the Euro. This might be an ominous sign, but it is expected considering the technological advancement the Japanese have been bringing about their country and the world in recent times. Along with the Euro, New Zealand and Australian dollars, traditionally the higher yielding yet riskier options, also tumbled.

Germany Against Seemingly Easy Solutions

As Germany opposed free usage of the rescue fund for Europe and uniform Euro zone bonds in the meeting of the four largest economies of European zone, investors lost expectations on the summit, predicting a general disagreement between the nations. This sends worrying signs to European nations, as the United States continues to pump up the value of American dollar.

A spokesman from the German government spoke about the concerns of Chancellor Angela Merkel. The spokesman highlighted that nations were looking out for easy solutions like liability sharing rather than addressing the core problem.

Investors Are Left Stranded Due To This Crisis

Brad Bechtel, the managing director of the Connecticut based Faros Trading Limited, said in Stamford that investors and the general public are likely to be disappointed and frustrated due to the absence of a possible solution for this crisis.

Investors are mainly concerned about Spain and Italy, the fourth and third largest economies in the Euro zone respectively. They are of the opinion that any further dip in Euro will lead to an economic instability that will be hard to restore.

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