Euro to attract policymaker action: falls on 2nd straight day on better US results.
Wednesday, 21 October, 2009, 8:00:18 a.m. GMT
Policy makers expressed concerns on the impact of a stronger Euro on the 16 nation Eurozone, on the EUR downfall as it continued for a 2nd straight day. Excessive strength in the currency could derail economic recovery in the Eurozone, which could further lead to a drastic downward correction in the currency.
Yesterday, the Euro fell after touching the 14 month high of $1.4994. The French President along with other European leaders have expressed the likelihood of steps to reduce demand for the Euro, in today’s cabinet meeting, as an exchange rate of $1.50, coupled with excessive volatility could spell disaster for the European economy and its manufacturing sector, not to mention the negative impact on the much needed economic recovery.
Today, the Euro advanced against the greenback as much as 15%, as the demand for exports took a hit on account of the recently rising Euro. The weakness in the EUR/USD pair was in part due to better than expected results from US majors including Apple, Caterpillar, Yahoo and SanDisk.
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