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The Euro appreciated slightly against the U.S Dollar in this morning’s session, but continued to hover around its new 14-month low as investors remained skeptical about the region’s growth as well as the risks of the sovereign debt crisis.
Yesterday, the Euro continued on its downwards slide against the U.S Dollar as concerns about the region’s economic growth dampened optimism of Spain’s public spending cut and of a successful bond sale in Portugal. The Euro lost another 0.2% falling to $1.2628 after previously reaching $1.2739.
The British Pound slide yesterday against the U.S Dollar, erasing the majority of the gains made after the Conservative party leader David Cameron was appointed Prime Minister. The Pound fell to $1.4879 after the Bank of England Governor reported that growth risks had increased over the last three months, and a resumption of Quantitative Easing was possible. According to the BOE’s report, U.K inflation will fall below 2% even if the benchmark interest rate remains at its current historical low level of 0.5%.
This morning, the bureau of national statistics will release the U.K Trade Balance – which is expected to widen slightly from -6.2B to -6.5B.
Skepticism that the $1 Trillion rescue package will not solve the EU’s debt crisis, have pushed Gold prices to record high levels of $1248.
According to University of Maryland professor Peter Morici “the Greek bailout does not address the underlying fiscal problem — the absence of EU taxing and spending authority. Investors, fearing the worst, are hedging by putting more of their portfolios into gold, and the price of gold rises.”
Written by Finexo.com