European Commission President José Manuel Barroso expressed his optimism on the Euro’s 2013 outlook. “In 2013 the question won’t be if the euro will, or will not, implode,” President Barroso said. “I think we can say that the existential threat against the euro has essentially been overcome,”.
It has been the talk for quite some time now, “when will the Euro collapse?”. Sentiment has improved, but just because Greece isn’t about to leave the Euro Zone, doesn’t mean the Euro Zone is in good shape economically. The fundamental issues in Greece, Spain, Italy, France, etc. need to be dealt with. Since the Euro crisis encapsulates all of these countries, one weak link can bring sentiment down and discourage their other Euro partners.
Brosso is confident in his optimism but German Chancellor Angela Merkel is confident that Brosso is wrong. At her New Year’s address she communicated to television viewers that the Euro was heading into another rocky year.
Some analysts think austerity measures being demanded by Brussels could lead to a longer recession and spending cuts. (Guardian)
With so many countries, so many problems, the actual outlook of the Euro economy really seems to be up for interpretation. Whether or not exponential improvements will be seen in 2013 presents a question mark.
A rumor was spread today of France being downgraded.
Reuters spoke with a French Official who called the claims “erroneous”.
France received a downgrade in November by Moody’s Investors Service. Downgraded to a Aa1 in November, going any lower would affect Euro sentiment.
News & Forex Trading
The ECB meets on Thursday. There is a slight possibility of rate cuts.
Whether a profound decision/announcement is made or not, economists and investors will tune in to hear what the ECB’s thoughts are for 2013.
Thursday could contain volatility for the EUR/USD in result of ECB statements.
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