May 21, 2010
Threat of Intervention Underpins Euro
The short-covering rally which began on Wednesday continued in the June Euro overnight ahead of Germany’s vote to approve the massive deal to save the common currency and
keep in check the Euro Zone debt crisis.
German lawmakers are expected to approve the recently proposed loan package which should be received by investors as a show of solidarity and a solid attempt to heal
public finances. Germany is going to play a major role in the political and economic unification of the Euro Zone so the approval of this historic aid package is most important amid the current
sell-off in the market.
After this week’s decision by Germany to curb naked short selling triggered a wave of negative publicity, today’s approval of the financial aid package by Europe’s
biggest economy will be a strong sign that it is genuinely concerned about bringing the Euro Zone nations together while showing its support for the Euro.
With a record amount of shorts in …
