Spain’s Banking Sector Weighs on Euro
Spain’s banking sector is driving the euro lower as Forex traders worry about the pressure being put on the 17-nation currency. Spaniards are sending money abroad, creating a bank run, and that is only making things worse for the financial sector. It’s not helping that there are still uncertainties over Greece, and in The Netherlands an anti-euro party is campaigning hard ahead of fall elections.
The entire eurozone is in disarray, and leaders in the region still have no idea how to solve the problems that beset the currency region. The recent bailout of Bankia didn’t help the situation in Spain; instead, consumers are worried about losing their money to failing banks and are withdrawing and sending abroad. At this point, some think that it might be a race to see whether or not Spain actually ends up out of the eurozone before Greece does.
In the meantime, the Greek situation has yet to be resolved, and problems in Italy are sure to crop up, now that the earthquake has impacted the economy. Add to this the slowdown in Chinese manufacturing, and there is a situation where it’s all about safe havens. And, with the yen strengthening dramatically, there are warnings that Japanese leaders could intervene.
At 12:51 GMT EUR/USD is down to 1.2314 from the open at 1.2364. EUR/JPY is down to 96.1355 from the open at 96.8475.
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