Worries About Health of Europe’s Banks Drive Euro Down
The euro slumped today on the concerns that the health of the European banks would deteriorate as they hold the government debts, damping the outlook for Europe’s economy.
The Wall Street Journal said that the stress tests of the major European banks underestimated some holdings of the government debt. The European Union performed the stress test of the banks in July. According to the report of the Journal, some banks excluded debt of the certain countries from their totals and others reduced amounts of their short positions in the account.
EUR/USD tumbled from 1.2874 to 1.2754 as of 11:13 GMT today.
If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.
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Earlier News About the Euro:
- Euro Rises on Good German Economic Outlook (2010-09-06)
- Euro Goes Up as GDP Surpasses Forecasts in US (2010-08-27)
- Euro Follows Continental Stocks, Goes Up (2010-08-26)
- Euro Weakens as Weber Suggests EU Economy Needs Help (2010-08-20)
- Euro Rises vs. Dollar on German GDP, But Can It Sustain Its Gains? (2010-08-13)
1 Comment
It’s not even as much the Wall Street Journal who said that, as it is the comparison between the banks’ financial statements and the stress test results, both publicly available. It’s not even that shocking that the info varies, as is the fact that the banks did not include notes as to why they excluded this or that amount (until specifically enquired about it by the media). Seems that the stress test reporting rules were too loose, so where’s the “stress”?
A weak Euro is good for the Canadian banks, for example, as it makes any acquisitions cheaper. Let’s see whether that brings some interesting news on its own!?!