By TraderVox.com
Tradervox (Dublin) – The euro has dropped to its lowest since July 2010 versus the dollar after EU leaders clashed over the joint bond sales which French Hollande is supporting to be introduced in the euro zone as a solution to the current debt crisis in the region. The EU Summit could offer an immediate solution to the problems in Spain attracting investors’ attention in to the problems in the region. This has sparked risk aversion in the market hence forcing the euro further down against the yen and the greenback.
The 17-nation currency dropped against the yen for the third day after euro zone reports indicated that services and manufacturing industries contracted in May as German business confidence dropped. The debt crisis in the region and the contagion fears are other reasons that have forced the pound down against major peers in the market. Safe haven currencies such as the dollar and the yen have increased against most major peers as concerns the debt crisis is worsening increased their demand. This trend is expected to continue as more news from the meeting is expected. The crisis is also expected to spill over to other high-yielding currencies such as south pacific currencies and the Canadian dollar.
After the summit, Angela Merkel, the German Chancellor indicated that a stronger economic cooperation between countries in the region is required before they could introduce joint bonds. The European Council President Herman Van Rompuy, indicated that Euro zone leaders are in no pressure to introduce the euro bonds.
After the meeting, the euro fell by 0.2 percent to 1.2555 during the start of the London session, it had earlier dropped to 1.2516 which is the weakest level it had been since July 2010. Against the yen, the 17-nation currency dropped by 0.4 percent to trade at 99.65 yen. The euro had dropped 1.5 percent yesterday making it the biggest drop this week.
Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management.
Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox
