In the face of concerning PMI data from all corners of the Eurozone the common currency dropped to its lowest level for three weeks.
With even France and Germany – the powerhouses of the 17 nation currency bloc – feeling the strain the pressure for Spain to request a bailout and boost flagging investor confidence is growing.
Spanish Prime Minister Mariano Rajoy remains reluctant to commit to a bailout and continues to disappoint markets with his resistance.
Widespread sighs of annoyance accompanied Rajoy’s insistence yesterday that a request for aid was not ‘imminent’ but with the Spanish service sector experiencing an extreme decline last month the struggling nation may not be able to afford to hold out much longer.
An important announcement is also due in another nation which has known more than its share of economic woes.
In recent years Portugal has been dogged by economic contraction, increasing unemployment levels and decreasing output. Following the weekend’s anti-austerity protests the nation is now braced for the announcement of yet more austerity measures.
Saturday’s protest was organised by the CGTP union and may have been peaceful (particularly when viewed against those recently held in Madrid and Athens) but thousands of Portuguese citizens stepped up to voice their opposition.
The Lisbon government had originally intended to hike social security taxes in order to raise some much needed funds but the population were so opposed that the scheme had to be abandoned.
The money required to plug the nation’s gaping economic holes must now be found elsewhere. Economists are expecting capital gains and asset taxes to be raised and are also predicting an upwards alteration in income taxes.
Portuguese Finance Minister Vitor Gaspar is scheduled to reveal the nation’s fate this afternoon.
The Pound to Euro exchange rate is currently trading at 1.2469
The Pound to US Dollar exchange rate is currently trading at 1.6121
The Pound to Australian Dollar exchange rate is currently trading at 1.5758
The Euro to US Dollar exchange rate is currently trading at 1.2929
The Euro to Pound exchange rate is currently trading at 0.8018
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