Euro Continues Bearish on Fiscal Crisis

The euro ended another week losing versus most of the 16 main trading currencies as a concrete rescue plan for several Eurozone members budget crisis hasn’t been proposed by government officials, bringing pessimism and declining confidence among traders to invest in the region.

The budget deficit crisis in Greece and to a lesser extent in other nations using the euro has nearly eliminated possibilities of interest rate hikes in the Eurozone anytime soon this year, and this added to the fact the EU is delaying a sustainable strategy to solve the issue is affecting market sentiment in Europe and globally, as analysts are more skeptical towards the economic recovery expected for 2010. The euro also suffered in the end of this week’s session, as gross domestic product figures published for last year’s final quarter brought worse than expected data, evidencing the lack of dynamism in the bloc’s economy.

The majority of investors prefers to stay away from the Eurozone as long as the debt crisis is not solved or, at least, with a feasible solution in the horizon, according to analysts. The euro is down and has no perspectives of recovering in the short-term, specially versus the U.S. dollar.

EUR/USD closed the week at 1.3629 from Monday’s rate of 1.3707.

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