A Spanish bailout has been agreed to, with eurozone leaders providing 30 billion euros by the end of July. On top of that Spain has until 2014 to meet its deficit reduction target. The news, while it has helped bolster stocks, hasn’t given the euro much of a boost. Euro remains lower against the US dollar as other issues take precedence.
While eurozone leaders have agreed to bail out Spain, markets are still waiting to see what happens related to the changes to the European Stability Mechanism, as well as the plans to tighten budget rules throughout the eurozone. These issues are before the German Constitutional Court; a decision about whether Germany feels the changes are consistent with German law is expected soon.
There are general hopes that the court will find everything in line with Germany’s constitution, but there are still some doubts. With these doubts, as well as concerns about the state of the eurozone economy (and the world economy), it is little surprise that high beta currencies like the euro are struggling a bit. Euro is also struggling against the UK pound, where economic data has played a role.
At 14:33 GMT EUR/USD is down to 1.2262 from the open at 1.2313. EUR/GBP is down to 0.7906 from the open at 0.7930. EUR/JPY is down to 97.4275 from the open at 97.9550.
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