Euro exchange rate gains some ground against US dollar but the currency remains weak

The euro’s exchange rate clawed back some ground against the US dollar in trading on Thursday, but the troubled European currency remains weak and likely to loose more value as ECB president Mario Draghi warns Europe’s leaders that they must clarify their vision for the euro quickly or risk disaster.

Latest Euro Currency Rates

As of 11:13 GMT the euro bought $1.24060 US dollars and UK sterling remained stronger, exchanging 1.25050 euros.

Draghi Comments

Mario Draghi has criticised the Spanish government for underestimating the scale of Bankia’s woes and called for the regulation of Europe’s most important banks to be taken out of the hands of national supervisors.

Mr Draghi told the European Parliament on Thursday that, when confronted with a “dramatic need” to rescue banks such as Bankia and Dexia, a Belgian lender, national supervisors repeatedly underestimated the amount a rescue would cost.

Draghi also says that eurozone leaders must decide what they want the bloc to look like in the future because the current setup is unsustainable. He said that the ECB could not “fill the vacuum” left by governments on creating growth or structural reforms.

EU economics commissioner Olli Rehn said more austerity was needed if the eurozone was to avoid disintegration.

Euro to Dollar 2 Year Lows

The euro currency slumped to a near two year low versus the US dollar this week and European economic confidence dropped more than economists forecast in May.

“The slowdown in inflation looks set to continue, but will probably be a slow-motion process. Although the ECB will likely keep interest rates on hold next week, President Draghi could open the door to further monetary easing later this year.” said Martin van Vliet, an economist at ING Bank in Amsterdam.

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Euro exchange rate gains some ground against US dollar but the currency remains weak