Euro exchange rate holding up against majors but concerns are growing

The shared currency of the euro zone has had a quiet time so far this month against the US dollar and other majors but concerns are once again growing that the EU and the euro are flawed which could lead to selling pressure on the currency anytime soon.

Latest Euro Exchange Rates

As of 08:15 GMT this morning, 1 euro bought $1.30270 USD (up 0.13 percent) and against GBP a euro bought £0.84270 (down 0.05 percent). The Euro fell below the $1.30 mark earlier this week and has weakened against the majority of its major currency peers after weak Purchasing Managers Index (PMI) data sent investors seeking shelter elsewhere.

Euro Crisis Remains

According to new findings from the polling organisation, Eurobarometer, a growing number of nationals in Spain, Britain, Germany, France, Italy and Poland have lost their trust in the EU, the Guardian reported on Wednesday. The surveyed countries jointly account for almost 350 million of the EU’s population of about 500 million.

The highest decline in confidence in the EU has been reported in Spain, where 72 percent are tending not to trust the EU, with only 20 percent tending to trust. Commentators say the mounting ‘Euroskepticism’ is regarded as a consequence of financial, currency and debt crises, harsh budget and spending cuts, and bailouts of the poor countries by rich nations.

The Spanish economy, the eurozone’s fourth biggest, contracted by 1.37 percent last year, the second worst yearly slump since 1970, and the government forecasts it will shrink again by between 1.0 percent and 1.5 percent this year.

ECB Interest Rate Cut

ECB (European Central Bank) interest rate cut expectations are mounting for a rate cut in May following run of disappointing economic news this week that has fueled market expectations that the bank will cut rates from a record low of 0.75 percent to stimulate the economy of the 17 European Union countries that use the euro.

However, as usual there are mixed feelings about the euro zone rates after top ECB official warned Thursday that another interest rate cut might not be much help for eurozone countries in recession — because already low rates are not getting through to businesses and consumers.

Joerg Asmussen, the bank’s top official for international relations, said that the “pass-through of rate cuts” would be “limited” since troubled banks are not able to send them on.

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Euro exchange rate holding up against majors but concerns are growing