''So why isn’t the euro much cheaper? Perhaps foreign exchange market believe that the worst of the euro-zone crisis is over, that the troubles can be contained, or that Europe will somehow muddle through as it did last year. But it seems far more likely that trouble flares up again in a way that weighs heavily on the euro (and brings stock markets down to earth, too). Portugal is rightly regarded as the next likely candidate for the IMF/euro-zone rescue fund. Its access to market funding looks precarious. It paid a whopping 3.68% on the 6-month bills it issued yesterday. Its ten-year bond yields have widened by 22 basis points as of 1.15pm GMT today, to 6.82%. It faces a real test next Wednesday when it makes its first scheduled foray into the bond markets proper. A failed bond auction would be a catalyst for fresh euro-misery..'' THE ECONOMISTMonday, January 10, 2011
WHY IS THE EURO SO EXPENSIVE?
''So why isn’t the euro much cheaper? Perhaps foreign exchange market believe that the worst of the euro-zone crisis is over, that the troubles can be contained, or that Europe will somehow muddle through as it did last year. But it seems far more likely that trouble flares up again in a way that weighs heavily on the euro (and brings stock markets down to earth, too). Portugal is rightly regarded as the next likely candidate for the IMF/euro-zone rescue fund. Its access to market funding looks precarious. It paid a whopping 3.68% on the 6-month bills it issued yesterday. Its ten-year bond yields have widened by 22 basis points as of 1.15pm GMT today, to 6.82%. It faces a real test next Wednesday when it makes its first scheduled foray into the bond markets proper. A failed bond auction would be a catalyst for fresh euro-misery..'' THE ECONOMIST
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