It was beginning to look as though an unnerving quiet had descended over the eurozone, with market attention recently focused on the short comings of the US and UK economy. But the problems have resurfaced today with investors picking up on an article from the Wall Street Journal that questioned the viability of the so-called stress tests for European banks that were held over the summer.
The report has taken the single currency broadly lower today, slipping over a cent against the US dollar. To be honest, at $1.29, the euro was looking over bought and would’ve been an attractive level at which to sell. Rumours that even German banks may need up to €100bn in additional capital has further undermined the improved confidence in the euro.
Sterling is now sitting back at €1.20, which appears a relatively comfortable level for the pair at present.
