European Debt Crisis

The Euro Slide

David Brancaccio Dec 14, 2011

One of the worst accessories in my drawer has to be a sterling silver tie tack in I got years ago in Europe. It’s like a “C” with two cross hatches — the symbol for the euro. Sure enough, when I tracked it down the other day, it was tarnished into a dull grey. Maybe it was a sign.

The euro fell to $1.29 and change today, its lowest since January. Experts say it’s a sign Europe is still hurting, despite last week’s proposed treaty to crack down on budgets.

Omer Esiner is Chief Market Analyst at Commonwealth Foreign Exchange. He’s watching the drop in the euro closely. The currency had stabilized before last week’s European summit, but Esiner says it’s falling now because leaders simply didn’t go far enough to fix the current crisis.

According to Esiner, when a country’s currency falls, it tends to make their products cheaper on the global market. In theory, that could help lessen some of the headwinds facing the euro. The problem is that a lot of German exports are sold to other eurozone states or the UK. And, with Europe on the brink of what looks like a very deep recession, that’s not going to help much.

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