The euro is in a difficult situation but will survive, says German chancellor Merkel. She calls speculation against some European countries dangerous and confidence will only be restored if Greece and other states with high deficits take action. She is grateful that Greece says they will tackle its finances, she says. Credibility in markets will depend on Greece fulfilling its budget pledges, she says. She will pursue the goal of having a stable euro, she says.
EUR/USD is lifting on that comment, but she is likely referring to a euro in which each state’s finances is tightly coordinated with the other members, as per the stability pact, not the exchange rate per se.
EUR/USD bounced from 1.3535 and trades now at 1.3552.
