By ForexYard – The euro fell back Monday after a warning that the wave of austerity sweeping across Europe could trigger a new recession. The euro had initially been helped by continued speculation of further quantitative easing by the U.S. as well as by weekend support from Chinese Premier Wen Jiabao as he conducts a tour of Europe this week.
Not only did Wen claim to support a “stable” euro but he said that Beijing would continue buying Greek bonds once the country returns to the bond markets. Wen’s comments came amid reports that China has been holding secret talks with the French to heighten coordination of exchange rates to make them more stable.
By midmorning, the euro had fallen back to $1.3698 from $1.3784 late on Friday in New York, according to analysts. Against the JPY, the euro also slipped back to 113.90 from 114.81, even though there is rising speculation that the Bank of Japan (BOJ) will provide further liquidity to Japanese money markets, one way or another, when it completes its latest two-day policy meeting Tuesday.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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