The Euro Exchange Rate is currently in the region of 1.3359 against the US Dollar as of 13:00 pm
After political unease and economic concerns wore heavily on the currency in the first half of 2012, the Euro has enjoyed a rally in recent months, gaining by 8.2 per cent on the US Dollar since July last year.
Although some industry experts, including Luxemburg Prime Minister Jean Claude Juncker, have argued that the common currency’s new-found strength poses no economic risk (Juncker recently declared that the Euro had no ‘optimum’ level) others are concerned that it could limit growth.
Earlier this month Mario Draghi, President of the European Central Bank, warned that the Euro’s advance posed a risk to inflation and growth. Now Lars Seier Christensen, a key figure Danish bank Saxo, has argued that the Euro is destined for collapse in spite of this present rebound.
During an interview Christensen asserted: ‘The whole thing is doomed. Right now we’re in one of those fake solutions where people think that the problem is contained or being addressed, which it isn’t at all.’
Christensen has previously argued that unless fiscal union is achieved in the 17 nation currency bloc the Eurozone’s currency will never survive in the long-term.
In this latest interview Christensen went on to state: ‘Another possible fallout is getting rid of some of the countries that are being ruined by being in the Euro, notably the southern European economies. People have been dramatically underestimating the problems the French are going to get from this. Once the French get into a full-scale crisis it’s over. Even the Germans cannot pay for that one and probably will not.’
Whilst France isn’t experiencing a ‘full-scale crisis’ it is having to cope with substantial job cuts, outside pressures and deteriorating levels of investment. Last week it was also revealed that the French economy contracted by more-than-expected in the final quarter of last year.
The economies of Germany and Italy, another two key Eurozone members, also shrank by more-than-estimated.
And on top of having to cope with the prospect of the currency bloc’s recession deepening, the Eurozone also has to tackle political issues in Spain and Italy.
Whether Christensen’s prophetic view of the Euro is accurate remains to be seen, but the Euro is sure to experience some volatility in the days ahead.
This week several key pieces of data for the Eurozone, including economic sentiment and consumer price indexes, will add to the forming picture of the region. If the figures should disappoint and further hint at a deepening recession the Euro’s rally could come to an end.
Current Euro Exchange Rates
As of 13:00 pm
The Euro to Pound Sterling exchange rate is currently trading in the region of 0.8625
The Euro to US Dollar exchange rate is currently trading in the region of 1.3359
The Euro to Australian Dollar exchange rate is currently trading in the region of 1.2952
The Euro to New Zealand Dollar exchange rate is currently trading in the region of 1.5794
The Euro to Canadian Dollar exchange rate is currently trading in the region of 1.3433
The Euro to Japanese Yen exchange rate is currently trading in the region of 125.4770
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