France Dons the Black Hat
Now that the euro has fallen to support, will the currency bounce or continue its retreat? The answer may lie in a battle of wills between Germany and France that's set to play out at Monday's Eurogroup meeting, and again later this week at a gathering of the G20. French President Francois Hollande and his allies would like to initiate steps to hold the euro's strength held in check. German officials, on the other hand, prefer to let the market determine the currency's value.
Hollande commented that the euro's value shouldn't depend "on the mood of the markets." This implies that tactics such as intervention could be used to cap the currency's rise. Steffen Seibert, spokesperson for the German government, countered with this: "Exchange-rate policy isn't an appropriate instrument to boost competitiveness." That suggests free markets should determine currency values. Seibert went on to say that the euro's recent rally is a sign of market confidence....404 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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