Euro steady and to hold attention
Published: 28 Aug at 9 AM
The euro started steadily in Asian morning trading today, but experts fear that it could see a downturn as investors worry that the European Central Bank maybe dragging its feet when it comes to resolving the region’s debt crisis. It is thought that the ECB may not now be able to present a plan at its next meeting on 6 September after the German chancellor suggested that Greece should leave the single currency in 2013.
After hitting a seven-week high of $1.2590 last Thursday, the euro declined on Friday but was still up 1.5 per cent for the week in the currency’s most impressive performance for six months. The common currency sat at $1.2514 this morning, with resistance at around $1.2597.
Experts expect that the euro will dip lower in the weeks leading up to the German constitutional meeting on 12 September. Hope also faded over the weekend for a clear resolution at the ECB meeting on 6 September.
The dollar sat at a two-month low of 81.221 last Thursday when hopes for a Eurozone resolution were at their highest, but the Greenback is now back up at 81.579 and 76.72 against the yen, recovering from a fall to 78.27 last week.
No major economic news is due to come out of Asia this week, meaning the focus is likely to stay on Europe, at least for today as Germany’s IFO business climate index is due to be released. In more bad news for the Eurozone, it is expected that the index, Germany’s most respected indicator of economic health, will show a fall for the fourth month in a row.