12th January 2012
The euro has responded favourably to the possibility of intervention from the European Central Bank (ECB) over the region's debt issues, but the single currency continues to hover around a 16-month low.
Later today (January 12th) the ECB is predicted to announce it is holding its rates at one per cent for another month, while the Spanish government bond auction which is set to take place at 13:30 GMT will be an early indicator of investor demand for debt, Reuters reports.
"There's a possibility the ECB will prepare the market for more rate cuts and that should be negative for the euro," said Marcus Hettinger, global currency strategist at Credit Suisse in Zurich.
Any failure on the part of the ECB to protect beleaguered economies like Spain and Italy could ultimately lead to the collapse of the euro as a viable currency, ratings agency Fitch has warned.
Earlier this week, the Wall Street Journal revealed US stock markets have responded poorly to ongoing fears over eurozone debt, with the Dow Jones Industrial Average losing 0.1 per cent of its value on Wednesday.
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