Thursday, May 26, 2011

Euro Falls Further Versus Sterling

The euro touched its lowest since March against the sterling on Wednesday, but held steady versus the dollar as Greece's sovereign debt situation remained unresolved.
Amid increasing calls for Greece to be allowed a "soft restructuring," the markets have expressed fears that Ireland and Portugal would be soon to follow.

French finance minister Christine Lagarde formally announced her candidacy to lead the International Monetary Fund today.

Lagarde would replace countryman Dominique Strauss - Kahn, who was expected to push for easier terms of a Greek bailout, but quit following an arrest on charges he attempted to sexually assault a hotel maid.

The euro slumped to GBP 0.8650 versus sterling, after official data showed the British economy expanded 0.5 percent in the first quarter, unrevised from the preliminary estimate.

U.K GDP contracted 0.5 percent in the fourth quarter of 2010.

Meanwhile, the euro was stuck near $1
4065 versus the dollar, unable to rise further from a recent 2-month low as $1.3968.

Germany's consumer sentiment is set to fall again in June after easing for two straight months as worsening debt crisis in Greece and high energy prices overshadowed falling unemployment and robust economic growth.

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