Daily Forex Brief | The last hurdle

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Daily Forex Brief London: Tuesday 11th October 2011
The last hurdle Slovakia is having its day in the sun today as it votes on the expansion of the European Financial Stability Facility (EFSF) today, the last of the 17 eurozone members to do so. Some are fretting that this could de-rail the EFSF expansion process, but this has all the hallmarks of a sovereign hissy-fit, rather than anything more significant. Slovakia says that it is unable to afford to bail-out more affluent countries, with GDP per head only 40% that of Germany's. That's precisely the reason that it can't afford to reject the EFSF expansion, with Slovakia needing the EU/euro far more than the eurozone needs it. Of course, this is not to say they will get booted out if they reject it, just that the EU (as has been indicated) will find away to go ahead anyway. The single currency was notable for its gains vs. the dollar yesterday, the biggest gain since 1st July last year, but don't be fooled by this, given that there were plenty of currencies gaining more (Scandis, Aussie and Swiss franc). The dollar index put in its worst daily performance (down 1.56%) since 15th December 2008. The euro is merely riding on the coattails of the weaker dollar, nothing more.
Also in today's Daily Forex Brief: Dollar's decline on falling fear The growing reach of European banks The danger Dexia poses for Belgium Read more...
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