The Forex online trading EUR/USD pair is trading closer to the 1.26 mark after July 2nd losses, and consolidating in that position. Market attention is now focusing on whether the measures agreed upon in last week’s European meeting will effectively resolve the debilitating European debt crisis.
The Forex online trading EUR/USD pair is trading closer to the 1.26 mark after July 2nd losses, and consolidating in that position. Market attention is now focusing on whether the measures agreed upon in last week’s European meeting will effectively resolve the debilitating European debt crisis.Struggling to restore global confidence on the Euro, European leaders took a significant step toward economic integration by easing the fiscal pressure on Spain and Italy while powerhouse Germany ceding on a direct bank refinancing.In effect, efforts were made to grant bailout funds more flexibility to come to the rescue of Spain and potentially Italy, as the European Union cannot afford the third and fourth largest economies of the zone to fail. There was also a breakthrough move towards more central control over their banking system with speculation of Greece’s renegotiation of their bailout package. In return for allowing the direct bank recapitalization by the bailout funds, Germany managed to carry through their idea of a single banking supervisory agency with the European Central Bank (ECB) playing a major role, similar to the role that the Federal Reserve plays in the United States. The forex online trading market rallied on Friday, suggesting a better than expected outcome amid low expectations. For experts, however, the fundamental problems of the Euro Zone are still unresolved. “In a nutshell, we think that Europeans have cracked open more doors than we thought, but they still have a lot on their plate, said Gilles Moec, an economist for the Deutsche Bank in London. “The discussion on fiscal integration and debt mutualization has not started in earnest.”On the other hand, Mario Draghi, President of the European Central Bank was quite pleased with the outcome, as it showed the long-term commitment showed to the Euro by all members of the Euro area.” An outcome that will bring the ECB more power and influence and define the Euro`s forex online trading performance in the next weeks. Indeed, German and European media alike are seeing the agreement not as a step forward in fiscal integration but as concession that will diminish Merkel`s control over economic decisions, even comparing it to the Germany-Italy Euro cup semifinal, in which the Germans lost 2-1. “Merkel caves in” wrote the popular German tabloid Bild, while Der Spiegel described the meeting as “The night that Merkel lost”. There are also big expectations for the European Central Bank decision for a rate cut when it meets on Thursday, in what could be the biggest forex online trading event shaping this week’s trading operations.