Turmoil continues as debt fears spread

3 August, 2011


Cyprus has become the latest country to worry about possible bailouts, as President Obama at the last minute signed the US debt extension into law.

Financial markets around the world are reacting to the US agreement, which extends the borrowing limit for the American government to cover US debt until the end of 2012. The US Dollar has remained relatively weak, giving rates for sending money to the USA around their best for a month.

In Europe, the Bank of Cyprus has warned that the Cypriot economy is not far from requiring Eurozone assistance, as Italian PM Berlusconi prepares to speak in Parliament on the Italian debt situation. The Greek bailout last month was supposed to buy the EU some time over the summer, but endemic problems seem to be emerging across the Eurozone.

As a result we also have a weaker Euro, with rates for buying the single currency approaching the best in the recent trading range.

What will happen next appears to be anyone’s guess, but it does look like buying currencies where debt problems are in the news is giving preferential rates at present.

In other news, this morning’s UK services data was better than expected, giving the Pound a timely boost. For the latest live rates, contact Currency Index and make sure you are positioned to buy or sell your currency during any advantageous changes in rates.