By James McKee
For the first time in over two months the Euro is seeing highs above $1.38 against the USD, due in part to Germany’s tight control of spending and efforts to control debt in countries such as Greece and Ireland. Still more problems loom on the horizon for the Euro that will be centered around mounting debt in other countries such as Italy and Portugal. The mounting debt problems in certain countries within the EU is dragging down less-burdened countries along with them. Most of the debt has been shouldered thus far by Germany, who has taken a much more active role at all levels in the financial systems of Europe.
During the initial days of conflict in Egypt the Euro fell sharply as risk appetite dropped, and the currency saw renewed vigor as investors poured in. The Euro has always been the stable currency above the US Dollar but as time goes on if Europe does not find a way to address its mounting debt the EU may find itself in serious trouble very soon. Germany’s recent wrangling with issuing European debt that forces buyers to shoulder European losses was a controversial move that saw much debate world wide.
The forex currency exchange has seen a great deal of turbulence due to both poor financial planning and rampant civil unrest in Europe in recent years. The temporary highs of the Euro are just that, temporary; the austerity measures recently put it into place across the continent have been semi-effective at best. Currency traders should take note of the recent initiatives by foreign countries such as China making moves to purchase the debt of countries such as Portugal. Such moves will be required for overall financial solvency in Europe in the near future if the continent cannot pull itself out of its debt quagmire than the Euro will remain a risky investment.
About the Author
The author’s love of life is ultimately rooted in his drive to learn forex
