“In the years ahead, the European Union may be needed to employ new financial mechanisms or correct the old ones so as to head off a severe devaluation of the euro currency and support the evolution of developed countries”, said Victor Safta (photo), network manager X-Trade Brokers.
Germany and France, Europe’s economic giants, have seen their economic growth rates turn positive in second quarter 2009, and stay in the positive territory in the coming quarter, which fuelled a fast and steady appreciation of the euro currency versus the US dollar.
“Greece’s dramatic economic situation and concerns over the spillover effects within the European Union have wiped out euro’s huge gains and pushed it to record lows on January 21, the weakest level since summer last year, the EUR/USD pair touching 1.4030”, says Safta.
X-Trade Brokers manager says Greece is not the only cause for concern of European bodies and developed countries, but also other countries like Spain that runs record economic deficits which will lead to a domino effect of international markets decline.
Positive signals of US economy have put the dollar on a bullish trend at the end of 2009 and ended year at 1.4318 against its European counterpart.
Year-to-date, financial markets have seen high volatility which is expected to remain high in the coming period, in the forex market, commodities, stock market indices and stocks, X-Trade Brokers said.
The upward revisions of economic growth rates in Germany and France for 2010, the positive US economic growth outlook in the last quarter of the year, as well as the still fragile economies of some European countries have added steam to major market movements across the world.
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