The measures that helped restore confidence in the Euro may weaken the Euro economies and will stop the rally in Euro. It is expected that at least for 3 months, Euro will not be strong.
Severity is bad for growth. In Europe, every nation is cutting spending. Spain, Portugal and Greece will cut their spending by an average of more than 4% of gross domestic product during 2009-2011. That indicates that Euro is in trouble.
In US, corporate spending on equipment and software jumped at a 22% annual rate, the highest increase since 1997.
The Euro strengthened 1.1% last week. In July, it gained the biggest monthly gain since May 2009. But its sustainability is a question and it will face downward pressure. A slow down in US economy supported euro rally.
The Germany unemployed data fell in July to the lowest level since November 2008. The government has done a good job. There is still a lot of stress in the euro-zone.
Though Portugal and Spain maybe bailed out, but loss of confidence will take the Euro down.
Severity is bad for growth. In Europe, every nation is cutting spending. Spain, Portugal and Greece will cut their spending by an average of more than 4% of gross domestic product during 2009-2011. That indicates that Euro is in trouble.
The Euro strengthened 1.1% last week. In July, it gained the biggest monthly gain since May 2009. But its sustainability is a question and it will face downward pressure. A slow down in US economy supported euro rally.
The Germany unemployed data fell in July to the lowest level since November 2008. The government has done a good job. There is still a lot of stress in the euro-zone.
Though Portugal and Spain maybe bailed out, but loss of confidence will take the Euro down.
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