The euro shows a timid gain against the greenback, 1.393 to 1.391 dollars against dollar on Tuesday night, pending the summit of European leaders to finalize their action plan address the debt crisis.
We must recapitalize European banks (100 billion) to absorb the depreciation to be decided in order to alleviate the Greek debt (discount of 50 to 60%) and at the same time empower the Fund to stability in the euro area reassure markets against the growing risk of spread of the crisis in Italy.
The cancellation of the Ecofin meeting, to be held this morning before the Heads of State and Government, however, leaves suggests that negotiations are more difficult than expected, and that politicians could be satisfied with announce a plan in outline without going into details.
Increasing the size of EFSF could involve assistance from the IMF, so an agreement within the G20. It is therefore likely that this evening the problem of the reaction force is not set EFSF.
Compared to the Japanese currency, the euro remained stable at 105.8 yen, while the dollar fell slightly to 75.9 yen. The single currency ahead a bit against the pound sterling, pound against the euro to 0.871, but depreciates against the Swiss franc at 1.218 francs.
