The Euro has weakened from its yearly high against the US Dollar and dropped against all but two of its major peers due to political uncertainty in the Eurozone’s third and fourth largest economies.
The single currency fell as Spanish Prime Minister Mariana Rajoy faces calls for him to resign after he and his Party find themselves at the centre of a corruption scandal. The EL-Pais newspaper alleged that it found documents that showed that Rajoy and leading members of the ruling People’s Party had received illegal payments. The scandal has rocked Spanish politics and could impact on Rajoy’s austerity measures.
Elsewhere in Italy, former president Silvio Berlusconi has narrowed the lead on front-runner Pier Luigi Bersani and is threatening to dent Bersani’s chance of winning and forming a majority government.
“Markets have been extraordinarily complacent,” said sovereign debt strategist Nicholas Spiro. “The prospects of a stable and reform-minded government in Italy are very slim. We think a nasty surprise is coming.”
Spiro’s ominous warning and German Finance Minister Wolfgang Schaeuble’s comments on February 1st that ‘The Euro crisis is not over,’ has caused doubts to creep into the market and has threatened to weaken the Euro from the yearly highs it posted last week.
A continually sluggish economy, continuing job losses in Spain, Rajoy’s corruption scandal and uncertainty over the outcome of the Italian election all have the potential to drag on the Euro and send investors back to the safe-haven currency’s.
These exchange rates were correct as of 09:45 am
The Pound to Euro exchange rate is currently trading at 1.1574
The Pound to US Dollar exchange rate is currently trading at 1.5727
The Pound to Australian Dollar exchange rate is currently trading at 1.5099
The Euro to US Dollar exchange rate is currently trading at 1.3584
The Euro to Pound exchange rate is currently trading at 0.8637
The Euro to Australian Dollar exchange rate is currently trading at 1.3043
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