EUR/USD Weekly Overview: USD Regains Strength

ForexNewsNow – Last week’s mayhem on global stock exchanges had major consequences on the forex markets with the dollar regaining some strength against the euro (EUR/USD), the pound and others.

Excepting the yen, which gained 0.7% this week against the dollar, all the major international currencies lost ground vis-a-vis the greenback: the euro and the pound lost more than 2% and Northern European currencies lost between 4 and 5%.

On Friday, the euro was trading below 1.3500 despite closing at around 1.4830 a mere 4 months ago on May 2, 2011.

It was reported that Greek Finance Minister Evangelos Venizelos was considering a discount of 50% on Greek bonds – a move not likely to reassure investors – although Athens denied the claim.

European Central Bank President Jean-Claude Trichet said on Friday that “the risks of financial instability have increased dramatically,” calling on political officials to act decisively to stem the current problems caused by the debt crisis.

After attending the meeting of the euro zone finance ministers in Poland last week, US Treasury Secretary Timothy Geithner expressed his “admiration” for the efforts the Europeans have made so far to resolve the debt crisis in the euro area, while adding that their reaction remained much slower than than of the markets.