Euro’s Boost from a Weak Dollar Won’t Quiet Crisis Fears

European policy officials, over the past year, have taken the approach to impending financial disaster by putting out small fires only when conditions seem to be borderline crisis. This method was working for the euro initially as interest rate speculation kept translated into higher rates and a definable period of expected stability. However, market participants are clearly growing weary of this ‘kick the can down the road’ approach – especially as the rate forecast has eased back and exposed the threatening balance between risk and reward. Heading into the new trading week, we will have to monitor the same themes that have dominated for the past few months; because should global financial conditions flag, it will expose the crumbling situation in the Euro Zone.