Foreign Currency Exchange Markets Rocked By EU-IMF Turmoil
The foreign currency exchange markets have been rocked ahead of a meeting between EU and IMF officials to decide whether the EMU bailout fund needs expanding.
- (1888PressRelease) December 07, 2010 - IMF Chief Dominique Strauss-Kahn is eager for EU officials to increase the existing €750bn rescue fund to protect vulnerable EMU states such as Portugal and Spain.
Yet members of the German government including Chancellor Angela Merkel are adamant that such an increase is unnecessary. Any increase in the EMU rescue fund would be chiefly financed by Germany.
The meeting between Strauss-Kahn and EMU Finance Ministers is scheduled to happen later today. But preceding the meeting the euro dropped almost half a percentage point on the foreign currency exchange market.
The markets are hopeful that before long the EU-IMF can agree a permanent solution to the EMU bond crisis.
Peter Lavelle, Economic Commentator at foreign currency exchange broker Pure FX, said: "The markets are waiting for reassurance from government officials that EMU member states remain viable investments. Until they can agree a solution confidence in the euro looks set to remain low."
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