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Euro Slumps on German Sentiment

The Euro lost ground on almost every other major currency today as German investor sentiment showed signs of waning. Germany has been the last bastion of economic power in the Eurozone and has, in the eyes of many, single handedly dragged the region forward at times. However, it now appears that the economic and industrial powerhouse is showing some very serious and potentially devastating signs of pressure.

The Euro dropped 0.4%, resting at $1.3064 this morning after yesterday’s solid performance which saw the multinational currency hit $1.3172, representing its highest price since early may of this year. It also lost out to the yen, with the pair sitting at 102.72 which represents a fall of around 0.5%. The yen/dollar pairing made little movement, resting at 78.65 Yen to the dollar.

Banks Fail to Uphold Pledge

Last year banks across Europe pledged to cut their assets by more than one trillion dollars in a bid to guide the struggling region through a difficult period, however there are signs that this has not happened. Banks across the continent seem to have actually gained assets.

UniCredit, Santander and Paribas have all failed to hit the targets set out by the European Central Bank last year, with European banks averaging an increase in assets of around 7%. Most analysts are pointing the finger of blame at Mario Draghi, who assumed the role of president of the ECB after the plans were made but then provided 1 trillion euros in loans to banks to encourage lending within the region. This has drastically reduced the pressure on the banks to meet the targets as it has created a false sense of stability but also helped to avoid a mini credit crunch and allow banks to focus on lending based on merit as opposed to current market conditions.

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