Great winter retreat: Euro falls to 11-month low, more downgrades could be final death-blow
ExtinctionProtocol.com
December 13, 2011
BRUSSELS – The euro dropped to an 11-month low against the U.S. dollar on Tuesday, with selling set to continue on concerns about a lack of unity among European nations to tackle the debt crisis and fears of more credit rating downgrades. Losses accelerated after the euro broke below its October low at $1.3145, followed by $1.31, and triggered a wave of automatic sell orders. Further key support levels lie around $1.30 and $1.2860, the 2011 low. Germany’s Angela Merkel has rejected any suggestion of raising the funding limit of Europe’s future bailout fund, the European Stability Mechanism (ESM), sources in her conservative bloc said after a meeting with the chancellor. But analysts were quick to point out that it was not the first time that Merkel had made such a comment. Peter Boockvar, a market strategist at Miller Tabak, said in an email that the German Chancellor made her position on this clear immediately after the summit of European Union leaders’ summit in Brussels last week. The ESM, which will replace the current EFSF bailout fund and should come into effect from the middle of next year, will have an effective lending capacity of 500 billion euros. European Council chief Herman Van Rompuy said on Tuesday that a review of whether funding was adequate would be completed in March. “It continues to show how difficult it is to orchestrate all the moving parts of these different sovereign nations in Europe and try to get them all under one kind of agreement,” said John Doyle, currency strategist at Tempus Consulting in Washington. Discord was also present at last week’s European Union summit as Britain shunned an agreement reached by up to 26 EU nations to pursue fiscal integration as part of efforts to tackle the debt crisis. Against the yen, the euro slipped to a two-month low of 101.74 on Reuters data before rebounding to 101.93, down 0.8 percent on the day. “The euro has come a long way to multi-month lows but frankly I am not tempted to take profit,” said Neil Jones, currency analyst at Mizuho Corporate Bank in London. “I am not certain what future euro negatives lie ahead. I am just certain there will be more.” -CNBC excerpt
