ECB Worries on Forex Market

On the foreign exhange market, traders are beginning to act with caution over the ECB meeting set for tomorrow.  There are fears that the ECB will not have enough ammunition to fight the economic slump in the Eurozone.  Interest rates will be cut to 1 per cent, say experts, and this will mean the Bank has finally reached the level of its UK and US counterparts.

But while US Bank chiefs are hinting at a slow return to stability, the ECB are less confident over the stats – rising unemployment, profit losses, growth reduction – all these are contributing to concerns over an unstable summer, and even social unrest.

The British pound reached four-month highs against the euro yesterday, and then retreated – this move reflecting the worries of traders over the outcome of the ECB meeting.

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