Euro exchange rate under more pressure as risk of losses resemble EU poker game
napara111The euro’s exchange rate is coming under more pressure from the markets as risks of losses against other currencies continue to make investing in the currency similar to a game of poker between euro zone states.
Latest Euro Exchange Rate
As of 10.40 GMT today, one pound Sterling exchanged 1.26080 euro, nearing a four year high against the shared currency, whilst one euro exchanged $1.2280 US dollars, slipping back in the direction of a two year low of $1.2225 hit on Monday.
Spanish Bank Funds
EU finance chiefs agreed a deal this morning which will release 30 billion euros of bailout funds for Spain’s troubled lenders by the end of July.
The euro zone ministers also decided to grant Spain an extra year until 2014 to reach its deficit reduction targets but made no apparent progress on how the bloc’s new rescue fund, the European Stability Mechanism, will be used to help lower Madrid’s elevated borrowing costs.
Huge uncertainty over the ESM will continue to pressure the euro on currency markets as German law makers mull over the text and consider blocking the deal.
“With the euro zone finance ministers meeting out of the way without proving to be a source of inspiration for risk assets, the focus of the market now turns to the German constitutional court,” said Chris Weston, an institutional dealer with IG Markets.
The German court is due to give its preliminary ruling on complaints against the ESM and the euro zone’s fiscal compact, which could ultimately lead to a further implementation delay.
Gambling Games
As new bailout funds are pledged to Spain, it makes us wonder if the current deals for Ireland, Portugal and Greece will come back under the spotlight. Recent financial decisions in Europe are starting to resemble a big EU poker game which the online poker industry would find quite amusing to take part, however these players are in fact the euro zone member states.
The problem is that everyone wants to win…
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Euro exchange rate under more pressure as risk of losses resemble EU poker game
