The situation with Greece’s debt was hurting the euro during this week, but by the end of the week traders glimpsed a light in the end of the tunnel. New hopes for Greece emerged and that helped the European currency to erase losses.
The beginning of the week didn’t bode well for the shared 17-nation European currency. The European Union leaders were divided on their views about measures to tackle the debt problems of Greece and the Greek government was in the face of collapse. The euro was trying to rise at first, but than abruptly dropped.
The end of the week brought unexpected, but welcomed, change to the Greek story. German Chancellor Angela Merkel and French President Nicolas Sarkozy reached an agreement, the International Monetary Fund provided a loan to Greece and German banks may participate in the bailout for Greece. Investor sentiment towards the euro improved and the currency rebounded. It hasn’t been able to erase losses against some of its
EUR/USD closed at 1.4310, almost unchanged from 1.4322, after going as high as 1.4497 and falling as low as 1.4072 during this week. EUR/JPY slipped from 115.03 to 114.54, while EUR/CHF rose from 1.2078 up to 1.2137.
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