Most people will have seen the headlines recently concerning the future of the European single currency. The Euro has had its hardest time ever in recent months, thanks to the worldwide recession. Many of its member countries have been struggling to cope with losses and hard times, and it is this situation that has forced the Euro to put its back to the wall.
Back at the beginning of May this year, the Euro was capable of claiming 1.3315 against the US dollar. This fell to a shockingly low 1.1942 at the beginning of June. News stories began to be published questioning whether the Euro could continue in the face of such troubles. Some people even stated flatly that the Euro could not and would not survive for a long period of time. In as little as five years we could be faced with a very different situation entirely.
The Euro is currently looking better though, at a rate of 1.3074 against the US dollar. So does this mean the worst of the changes are over or is there more drama yet to come?
It certainly seems as if the worries of recent months have died down a bit - for the moment at least. But let’s not forget that although the recession is over, times are still hard as countries try to get back on their feet. We have seen that Greece in particular is having a very hard time financially. Greece has a debt crisis that has led to the Euro struggling to the extent it is now. The worry is that if one country can harm the Euro to this extent, what will happen if several countries are found to be in trouble?
It is definitely good news that the Euro is looking stronger than it did a few weeks ago. But this does not mean it is safely out of the woods. Other major countries will be watching closely to see what happens. If nothing else it has proved that a single currency works just fine when times are good and every country is looking healthy. It is when things go downhill that it is placed in jeopardy.
It will be interesting to see what position the currency is in at the end of the year. Will the Euro be stronger still or will its current position turn out to be rather fragile?