By: Barbara Zigah
Investors had hoped that this week’s meeting of finance ministers from the Eurozone would result in a strengthening of the rescue fund, yet no definitive outcome came from yesterday’s meeting, and investors get the sense that the market is placing more significance of the fund then are the finance ministers.
Consequently, the common currency is coming under renewed pressure, and as reported at 11:46 a.m. (SGT) in Singapore, the Euro was trading lower against the U.S. Dollar, down .1% to $1.3286, rebounding slightly from the $1.3254 low it had earlier struck. The Euro was also lower against the Japanese Yen and the Pound Sterling, trading at 109.71 Yen, a .2% decline, and 83.41 Pence, a .3% drop. Some investors see the possibility of the Euro trading as low as $1.30 within the next few weeks.
The Eurozone safety fund, currently set at a maximum of €440 billion, is believed insufficient if Portugal and Spain finally made the decision to seek a bailout. Further, many analysts argue that a new bailout mechanism must urgently be developed. One official from within the Eurozone commented that he was confident that the bailout fund would be expanded.