Euro/dollar trades have hit a four year low of 1.2185 as the unexpected ban on naked short selling of certain financial stocks and credit-default swaps enforced by Germany’s financial regulator has added to the lack of confidence surrounding the euro. But Mark O’Sullivan, director of dealing at leading foreign exchange firm Currencies Direct, believes further falls in the value of the euro could be seen over the coming days.
Mark O’Sullivan said: “While politicians are still trying to blame speculators for the fall in the euro, it’s the market’s loss in confidence in these politicians’ ability to implement the austerity measures needed domesticallythat is at the root of its decline in value.
“Germany’s actions are little more than window dressing to please an electorate already unhappy with having to bail out their European neighbours. If anything the German actions could make the situation worse as liquidity dries up and banks stop lending to each other.”