The euro was stronger at the beginning of todayâs session, boosted by the optimism that persisted from the last week, but trimmed its gains and fell against some major currencies later after Italian Prime Minister Mario Monti warned that the eurozone may fall apart because of the disagreement among the European Union members.
Monti said on the weekend that “the tensions that have accompanied the eurozone in the past years are already showing signs of a psychological dissolution of Europe”. Germany is considered to be the most serious obstacle in finding a cure to the problems of the eurozone as the nation’s leaders refuse almost any course of action except for “more austerity”. It looks ironic as most people think that the EU is a creation of Germany and believe that the country is most interested in retaining the eurozone.
Earlier, the euro extended its rally from Friday as traders hoped that the European Central Bank would take some action, most likely would start its bond-buying program. Yet the ECB President Mario Draghi said last week about the decision that the program was “unanimous with one reservation, with one position that reserved itself”. One can easily guess that the opposition likely came from the Bundesbank. It is hard to believe in bright future of the euro-area when Germany opposes any attempt to rescue it.
EUR/USD traded at 1.2411 as of 19:44 GMT today, rising a little from the opening of 1.2393, while it fell to the low of 1.2340 earlier. EUR/JPY dropped from 97.41 to 97.03. EUR/GBP was up from 0.7925 to 0.7945 and it daily maximum was at 0.9761.
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