The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3355 level and was capped around the $1.3445 level. The common currency is still suffering from Greek-related problems. European Central Bank member Weber indicated this week that Greece's financing needs could exceed €100 billion, far above early estimates. There is market talk that Greece's financial assistance needs will also be significant in 2011 and 2012 and will require eurozone partners and the International Monetary Fund to contribute a much larger amount of cash than originally anticipated. German Chancellor Merkel is said to be the major decision-major in the multilateral Greek assistance program, and there is also talk that Greece may require assistance much earlier than previously believed on account of its inability to refinance a lot of debt in the capital markets. The common currency may likely continue to weaken as long as there is an appreciable amount of uncertainty regarding Greece's cash needs. The IMF today warned there could be a contagion effect in the eurozone on account of Greece's fiscal crisis. The IMF also reduced its German 2010 GDP growth forecast to 1.2% from 1.5% and the IMF called on the ECB to keep interest rates exceptionally low. PMI data will be released throughout the eurozone over the next couple of days. In U.S. news, data released today saw MBA mortgage applications improve 13.6% in the latest week. There is talk that Congressional Republicans and the Obama administration may be narrowing their differences regarding financial and regulatory reform. Some key Democratic Senators are calling for the Fed to lose its supervisory status over small banks. Euro bids are cited around the US$ 1.3175 level.
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