The EUR recovered this week versus the USD. The single currency started the week trading around 1.2816 in the Asian session after a very strong Non-farm payroll figure in the US. The EUR received a strong shot in the arm on July 10, as the Fed’s minutes were released. Shadows were cast on the end of quantitative easing in the United States with a divided Fed membership. The EUR shot up to above 1.31 and was able to maintain some gains even after Fitch Ratings downgraded France. At the end of trading on Friday the currency is hovering in the 1.3040/50 range.
While the currency has able to recover some ground the Euro zone economy was rocked by major scandals. Luxembourg PM Jean-Claude Juncker is set to call to snap elections after a spying scandal broke. Juncker is one of the longest serving EU politicians. Luxembourg was not somewhere where there was a high political risk expected and this piece of news took the market by surprise.
Italy on the other hand is no stranger to political drama. The Berlusconi case continues to complicate matter for the current government. In order to avoid some of the alleged crimes from expiring, the courts are fast tracking Berlusconi’s appeal. His party are protesting the decision because if Italian justice took their regular time, he would not be liable for those crimes. The protest could end up with the coalition that is currently in power which would take Italy back to the polls.
Portugal is facing the end of its political party coalition fracture. With the sudden resignation of its Finance Minister over the current austerity package came the resignation of a political party leader that was a member of the coalition. The President of Portugal has asked the two ruling parties and the opposition to come together and reach a “national salvation” agreement. This agreement will have to include the implementation of the austerity laden bailout program. Portuguese bond yield have been negatively affected by the political uncertainty and have shot up to 8%.
- ECB Member Confirms Monetary Policy Will Remain Loose
- Europe Factory Output Drops in May
- UK Construction Falls in May
- S&P Upgrades Ireland’s Credit Outlook to Positive
- Analysts See European Banks and Unemployed Youths as Top Risk Factors
- German Central Banker Says ECB Not Bound to Forward Guidance
- Luxembourg PM Juncker Resigns Due to Spying Scandal
- Greece Receives Aid Prepares for September Next Troika Audit
- Italian Government in Jeopardy over Berlusconi Appeal
- S&P Downgrades Italy’s Credit Rating
- Moody’s Upgrades UK Banking Sector to Stable
- European Commission Unveils Plan to Winding Down Failed Banks
- IMF Downgrades its Global Growth Forecast
- UK Manufacturing Drops in May
- IMF Upgrades UK Growth Forecast to 0.9 Percent
- UK Housing Prices Jump in June
- Latvia to Become 18th Euro Zone Member
- Optimism or Delusion? IMF Lagarde believes Greece will reach surplus by end 2013
- Greece On Track To Receive Bailout
- German Central Banker Says ECB Cannot Solve Euro Crisis