Source: ForexYard
A sharp decline in the value of the euro (EUR) this morning was offset somewhat after the European Central Bank (ECB) decided to intervene by purchasing Italian and Spanish government bonds. The euro zone has been hit hard by debt contagion spreading to its peripheral countries with more force. Weathering this storm will require crafty work by the ECB in the days ahead.
The ratings downgrade of US debt by S&P’s ratings agency has caused a stir in financial markets, though few see the move as strongly affecting dollar values yet. A big loser in the downgrade has been non-US financial markets that are seeing more disruption by the turmoil recent events are causing on the economic landscape. Europe’s intervention may not be the last of its kind by world leaders in the weeks ahead.
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