Euro Falls to Record Lows, 1.2540 not Seen Since July 2010 - 24.5.2012

The EU summit did not bring any decisions on the big issues of the euro-area. Eurobonds were discussed but again met the opposition of German Chancellor Angela Merkel. Germany is opposed to Euro bonds because AAA rating of German economy will allow for low borrowing costs and northern European Countries will start spending again. European Leaders are supporting Greece to remain in the euro-area but Greece has to respect its commitments on the second bailout plan from IMF and EU.

The Euro is trading now at the 1.2529, falling further from the 1.2612 support level that held the downtrend for some hours yesterday. The 1.2540 level was not seen since July 2010, the shared currency is declining for a third day versus the US dollar while the debt crisis is deepening. Latest Economic news coming from Europe show expansion of the German economy as the quarterly German Gross Domestic Product is increasing as expected at 0.5 per cent, mainly affected by exports to emerging markets like China. The Flash Manufacturing production for Eurozone was less than expected for May at 45.0 from 46.9 in April as it was reported today. Lastly the German business confidence IFO index was less than expected and fell compared to the previous figure to 106.9.