Currency forecasts aren’t infallible, the markets are very volatile at the moment and if a central banker sneezes then the rates of exchange can take a big leap. That’s what happened yesterday when the European central bankers came out in force to re-assure the financial markets.
Germany’s big hitters assured the market that their €750 billion bail out fund is deemed more than adequate to fund any bail outs well into 2011.
“We think the question does not arise because only one country so far has applied for assistance from the (fund) and it is not an amount that makes us worry that there would not be capacity,” the ministry spokesman said.
Earlier in the year Weber has stated that the fund will be extended if needed but it seems that won’t be necessary just yet. Maybe the Euro is undervalued at this point, or maybe not, the currency markets are pricing in risk and risk is a shady business.
“If that amount is not enough, we could increase it,” Weber said. “An attack on the euro has no chance of succeeding.”