Euro – Down Baby, Down

Down baby, down. Who said 1.30 is not possible (Not me – Bearish euro calls)? Trouble begets more trouble. As I said on my twitter feed no one wants to own euros. Irish, Portuguese and Spanish 5 year CDS spreads have all widened (What are Credit Default Swaps?). I expect more rating actions that will spook investors from owning euros. The next should be Standard & Poors who currently rates Ireland an A, 2 notches higher than Fitch and Moody’s. European government officials are so concerned about these recent rating actions that they are stepping up their efforts to stabilize confidence – the ECB announced this morning that they will establish a swap line for Ireland in case they need it. Watch for more downside in the EUR/USD!


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