In US trade, the euro came under some downside pressure as the ‘growth’ package offered up by the EU leaders failed to inspire the market.
While the €120 billion package was marginally below the €130 billion flagged last week, the big question is – where is this money going to come from? Aren’t most of these countries broke? It’s almost comical that these leaders can come together and just announce they’re creating a multi-billion dollar bailout package.
Reports that Italy is not prepared to formally sign off on the growth package until a deal is reached on an EFSF/ESM bond-buying proposal added a late twist to the proceedings, but the euro’s reaction was relatively minimal. A weaker-than-expected German employment report added to trader negativity towards the euro. Having ended yesterday’s Australian session around the 1.2510 level, the euro fell to a low of 1.2407 before recovering to close the US session at 1.2444. Upon resuming for Asian trade the euro is essentially unchanged.