The Euro continues to linger around 1.2300 levels against the US dollar, extending its broad uptrend after hitting its lowest levels in 25 months last week. The negative newsflow pertaining to the debt crisis has been halted for this week though the IMF has raised a warning about painfully slow growth in the region.
Slow-growth Euro zone nations risk deflation, and persistent debt concerns put the Euro zone's future in doubt, the International Monetary Fund warned today. Companies and households hesitant to spend because they hope prices will fall in the future can be pushed into bankruptcy as real estate and other asset prices fall.
Meanwhile, the single currency has been mostly up after the US Fed chairman Ben Bernanke stopped short of giving any idea about a possible round of further quantitative easing and mixed economic data mostly pushed the stock markets higher.
Earlier in the week, the IMF had noted that the US Congress should raise its federal debt ceiling soon or risk disrupting the global and the US economic recoveries. The IMF lowered its economic growth assessment for the United States from 2.1 percent this year to 2 percent. In 2013, the IMF projects the U.S. gross domestic product will climb 2.3 percent.
Euro tested highs of 1.2323 against the US dollar but slipped as Spanish borrowing costs rose above 7% and markets eyed the German parliament's vote on Spanish bailout. The single currency quotes at 1.2304 right now.
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