Euro continues its downtrend– Hungarian Forint down on budget deficit problems

Euro continues its downtrend– Hungarian Forint down on budget deficit problems

02-17-2010 06:20

Europe’s Single Common Currency has shown signs of another gloomy trading session, after suggestions by EU officials that Greece should execute more extensive budget-cut measures to receive support by the eurozone financial authorities to bring its increasing fiscal crisis to an end.

Budget deficit

The Common European Currency has began this week with a decline against the US Dollar and versus currencies from its major trading partners, after the EU didn’t come up with a concrete restructure plan for the southern European nation to decrease its budget deficit to levels that are considered as economically healthy.

Greece budget problems

The southern European nation should present a report to the European Union by March 16, to prove that it takes sufficient measures to decrease its budget deficit. A significant number of doubts about how the situation will develop is shifting attractiveness out of the bloc due to the fact that currency traders fear that solutions for the Greece budget problems will result in higher costs for other members of the European Union.

16-nation euro area

The prospects for the eurozone currency are still pessimistic and the downtrend will probably continue, particularly against the Greenback and emerging market currencies, given the fact that there are more members of the 16-nation euro area with financial problems, which isn’t a positive outlook for investors.

Hungary

Not only EU nations struggle with increasing fiscal problems, but also several Eastern Europe countries are facing a budget deficit crisis. The Hungarian budget deficit is much higher than the ECB requirements, which has a negative impact on the Hungarian Forint.

Hungarian Forint

The Hungarian Forint posted one of the weakest results this Tuesday in forex markets, as the IMF confirmed that Hungary may not be able to attain its budget deficit goals, causing traders to evade Forint-priced assets, while more eurozone countries reveal budget deficits.