Friday, 23 Jul 2010

Euro Tumbles as Stress Tests Fail To Ease Investors' Concerns

The Euro dropped to as low as the 1.7790 level against the Dollar today. The Euro dropped against most of the major currencies, including a 140 pips drop against the British Pound.

The Euro slid today following the results of the Euro-Zone stress tests. The results showed that only seven bank have failed the tests. Nevertheless, the arguably positive results did not manage to ease investors' concerns. Due to the questionable methodology of the tests, investors still fear that the major European banks may not be able to sustain a possible debt crisis that continues to threaten the region. As long as these concerns remain, the Euro might drop further.

Looking ahead to next week, many interesting publications are expected from both the U.S. and the Euro-Zone. Traders are advised to follow the discussion regarding the stress test results. This discussion is likely to proceed throughout the weekend and the beginning of next week, and the market is likely to be affected by it.