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Currency News – New Draft Deal On EU Budget Rules

As a deterrent to help prevent future situations like what is currently happening in the euro zone, the EU has reached a deal to make its budget rules that all member states have to abide by a lot tougher.

While there has always been a solid set of debt rules in place, the new deal will allow action and sanctions to be taken a lot quicker against member states who aren’t following them or are in danger of falling into deep financial trouble. Before the euro zone financial crisis took place, there were lots of warning signs in many of the problem areas that weren’t really acted on – if they were caught and remedied a lot earlier, we may be in a totally different position.

In regards to the big picture, the main thing that the EU is starting to understand is that it is easier to hit problems hard before they grow into something as big as what is happening right now. Hindsight is 20/20, but if we learn from the mistakes that have been made in the past, our financial futures will be a lot more stable.

 

Euro Experiences Best Week In Two Months 

After a few really bad weeks for the Euro, it seems as though this week may be the best we have experienced in the last 8. There are many reasons why the Euro has been gaining on the dollar, but most people attribute it to the European Central Banks joint plan to offer 3 month US Dollar loans to banks who need them. This should alleviate a lot of the pressure and allow people to be confident that there will be liquidity available until the end of the year.

But, the Euro could take a turn next week because of the Federal Reserve meetings in the US. While there aren’t really any big changes expected to take place in terms of fiscal policy, some people do expect a small intervention in the bond market to try and stimulate the economy. By Wednesday, we should know the changes that are being made and should be able to see how the markets will react. Some people theorize that since the bond market intervention is probably going to happen, it has already been priced in and there will be no real changes after the Fed meetings. As with anything, though, we will have to wait and see to understand the full effect it will have on the value of the Euro.

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