Euro exchange rate: Today's session is set to end badly as EUR is sold-off across the board

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Category: Exchange Rates

Published on Friday, 17 August 2012 14:27

Written by Will Peters

"The eurozone is very important for the Netherlands. We've benefitted a lot from Europe and the single market." - Dutch finance minister, Jan Kees de Jager.

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The euro (Currency:EUR) is being sold-off in dramatic fashion this afternoon, this even as equity markets maintain their earlier gains. That all other asset classes are standing still would suggest that the move is flow related, and mirrors that of Wednesday when the Swiss National Bank tool action.

Obviously no one will know for some time if this is the case, nevertheless, the euro dollar exchange rate is 0.32 pct down on last night's closing level, EUR-USD is at 1.2317.


The euro pound exchange rate is 0.13 pct lower at 0.7842.

Today's drop follows yesterday's spike in the euro dollar rate, and serves as a warning that one can never get too comfortable with the currency markets.

Meanwhile, there is further reaction to the Finland foreign minister's revelation that the country's government has gone as far as to entertain the notion of a possible eurozone break-up.

The Dutch finance minister, Jan Kees de Jager, distancing himself from his fellow eurozone member, said: "We never speculate about an exit from, or the break-up of the eurozone. The eurozone is very important for the Netherlands. We've benefitted a lot from Europe and the single market."

Finland is preparing for the break-up of the eurozone, the country’s foreign minister warned yesterday.

The Nordic state is battening down the hatches for a full-blown currency crisis as tensions in the eurozone mount and has said it will not tolerate further bail-out creep or fiscal union by stealth.

“We have to face openly the possibility of a euro-break up,” said Erkki Tuomioja, the country’s veteran foreign minister and a member of the Social Democratic Party, one of six that make up the country’s coalition government. “It is not something that anybody — even the True Finns [eurosceptic party] — are advocating in Finland, let alone the government. But we have to be prepared,” he told The Daily Telegraph.

Madrid's mayor has spoken out about Spain's economic predicament, saying that it "seems inevitable" the central government would apply for some kind of international aid package as the country goes through a deep recession and borrowing costs soar.
Reuters reports:

Ana Botella, wife of former Prime Minister Jose Maria Aznar, is the first high-level Spanish official to say publicly that the country would need a financial rescue.

"There's no doubt about it. It's very probable that we're going to have to ask for help from the European Union," Botella told Spanish news agency Europa Press in an interview.

"It seems inevitable," the agency quoted her as saying.