The Fx-ForeignExchange Euro Report, this week, 29th September, 2010.
The Euro has been the main beneficiary of the US Dollar weakness this week, with substantial gains for the EURO against the USD, with modest sporadic gains against the Pound.
However, the euro has large problems lurking in the shadows and most foreign exchange buyers seem to have ignored some of the key factors that may lead to a rapid downfall of the euro.
Without doubt, the vast Anglo Irish Bank’s debts, announced this week, will eventually seep through. To put this in perspective, the Anglo Irish Bank’s debts currently amount to more than one fifth of Ireland’s GDP! The bank’s credit status has now been reduced to one step above “Junk” status. The woes of Portugal’s debts add further concerns as borrowing expenses increased. This week, Portugal added a little credibility with a successful government bond sell off.
Overall, the euro sits on a knife-edge. Considering the widening Eurozone debt, the euro has outperformed all expectations. This may be because currency buyers are well aware that there is a vast bailout fund available from the EU and IMF available, if necessary. In addition, the European Central Bank clearly have no plans to artificially weaken the euro.
If you hold euros at the moment and wish to take advantage of the current prices, it may be worth talking to a dealer at Fx-foreignexchange about your options. If you import, or export, you may be interested to discuss how you can fix a good currency rate now, and pay later.
This weekly currency exchange report is for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. FX-Foreignexchange cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
