Monday, January 17, 2011

Euro falls as rescue fund deal hopes fade

Financial Times
January 17, 2011

The euro came under pressure on Monday as hopes faded that eurozone policymakers would make meaningful progress towards extending a rescue package for the region.

Last week, the single currency put in its strongest performance since May, when Greece’s rescue package was pulled together.

The single currency was lifted by reports that Germany was backing plans to give new powers and lending capacity to the European financial stability facility, the €440bn eurozone rescue plan.

Hawkish comments from Jean-Claude Trichet, president of the European Central Bank, also boosted the euro last week as he emphasised rising price pressures in the region and implied that the eurozone debt crisis would not stop the central bank from raising interest rates.

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