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Euro Struggles after ECB Comments

July 10, 2013 at 12:15 by Miranda Marquit

Stack of one-euro coins on a chartEuro is struggling today. Even though the 17-nation currency is higher against the US dollar and the UK pound right now, it is having difficulty maintaining its gains, and there are concerns that could bring it down later.

Earlier, the euro dropped to a three-month low against the US dollar on the latest comments coming out of the ECB. Board member Jorg Asmussen expanded upon remarks made by ECB president Mario Draghi last week. He said that the ECB might agree to more cheap loans in order to provide capital to eurozone banks, and he also reiterated the idea that interest rates might be kept low beyond the 12-month mark.

With the eurozone still struggling with recession, these stimulus measures are to be expected. However, they tend to weaken the eurozone.

On top of that there are questions about the 17-nation currency, and how unified it is. Cyprus is suffering from capital controls, and the reality this shows is that the “unified” currency really isn’t all that unified. Cyprus problems show that there are really two euros — and the one Cyprus has is second class.

At 12:12 GMT EUR/USD is up to 1.2811 from the open at 1.2781. EUR/GBP is up to 1.4894 from the open at 1.4867. EUR/JPY is down to 128.4280 from the open at 129.3050.

If you have any questions, comments, or opinions regarding the Euro, feel free to post them using the commentary form below.

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