Debt package agreements in European Union

European Central BankThe plight of debt-ridden European countries is still the most dominant factor in relation to the future value of the Euro in relation to other currencies.

This past week has witnessed a handful of developments which show strong indication that not only is the threat of a fiscal breakup more serious now than ever before, but there are also some beginning indications that the European Central Bank is becoming aware that the time and monetary allotments given to struggling countries such as Greece may not be enough.

Although some ECB board members hinted that there may be room for renegotiation in terms of the next tranche of funding for Greece, Germany has held firm that Greece must still meet the stipulations laid out in the previous debt package agreement. Moody’s now sees a one in three chance that Greece may be forced to leave the union and has urged other countries to consider the implications should this scenario become a reality.

Additionally, alarming developments in Spain have caused investors to further contemplate their long term trading positions. Although Spain’s finance minister has plainly denied the need for a rescue package many forex analysts see a bailout as all but inevitable. As Spain’s prime minister Rajoy continues to struggle with the implementation of fierce austerity packages, social and political unrest has gripped the country’s region of Catalonia; many Catalans now seeking independence. This is further indicative of a weak economy and unemployment levels of over twenty-five percent.

Binary forex traders should continue to expect a sideways movement of the Euro/Dollar relationship but should economic developments in the weeks ahead follow their course, the currency may lose value once again. This may present a short term buying opportunity for those seeking to capitalise on continued European instability across the continent.

Wednesday, October 10th, 2012 europe, news

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