The single European currency was again misdirected against the U.S. dollar on Tuesday as the sense of caution took precedence over optimism. This afternoon, the euro gave further 0.25% against the dollar at 1.3702 dollar. It had already sold 1.04% last night.
A decline was also found against the yen – 0.63% and 104.9 yen, the euro, sterling (- 0.26% to 0.8701) and the Swiss franc (- 0.11% to 1.2338 ).
The euro / dollar fell from around $ 1.31, October 3, up 1.3914 yesterday morning, before flowing back. The reasons for this return are to be found in an exaggeration of the likely rise in the euro last week compared to the latest developments in the sovereign debt crisis in the rating downgrade of Spain and many private banks.
In addition, current statistics of the morning were not brilliant. The ZEW economic sentiment in Germany has been deteriorating for the eighth consecutive month, five points to -48.3 points, lower than the forecast of economists (to – 45).
Indicators sunk below a historical average (25.3 points) and you need to go back to November 2008 to find a figure as low. Financial experts can see their fears come true, that the sovereign debt crisis leads companies and German households to postpone their investments and consumer spending.
Markets are also concerned about the surveillance by Moody’s rating of ‘AAA’ sovereign debt of France, considering that Paris now has a lesser flexibility in its balance sheet in 2008.
