Just when fears in Europe had been appeased by the agreement of a permanent rescue mechanism for Euro nations, the excessive amount of ratings issues realised over the last week, have shown their affect in the market.
The Euro toppled down against the Pound and the US Dollar on Friday and is starting the week lower as markets digest the series of rating downgrades that agencies have been imposing on various Euro nations over the past week.
As rating companies continue to downgrade the credit ratings of nations such as Ireland and put other nations such as France, Portugal and Greece on review, the continuing flow of sovereign debt issues remains very much in focus. The European Central Bank has raised particular concerns that flaws inherent in the Irish bail out legislation will prevent Irelandââ¬â¢s ability to provide collateral future funding.
Although a rescue mechanism beyond 2013 was agreed for European nations last week that initially helped the single currency, there is still some feeling that other contentious issues between nations have not been resolved which is likely to continue to drag down the currency.
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