The euro yesterday rose above $1.45 for the first time since January 2010 as officials of the International Monetary Fund, the European Commission and the European Central Bank were due in Lisbon to start preparing an estimated 80 billion euros ($116 billion) in aid for Portugal. The European Union aims to reach an agreement on the package on May 16, about three weeks before Portugal’s June 5 elections.
“Now that Portugal is in the hospital, so to say, that’s pushed back the sovereign concerns as an issue,” said Capurso.
ECB President Jean-Claude Trichet and colleagues raised the main refinancing rate last week to 1.25 percent from a record low 1 percent, where it had been since 2009, and left the door open for further rate increases.
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Comment: Does anyone remember how alone I was a couple of months ago when I said that the euro would rise rapidly down from its low of about 1.19 to over 1.40? There was an avalanche of anti-euros in the market, and Krugman and Roubini, as always, couldn't be happier to spill more fuel into the fire. I know, I know, finance is probably the only professional activity were being right doesn't pay in contrast to being wrong because being wrong usually means to follow the crowd and we all want to hear what we suppose that we know. If you want to make a career as a financial guru, better say what your listener wants to hear. Do not care whether it is right or wrong. This is a bitchy business. Yet in the end it is the suckers that pay. And rightly so. Bleed on, you crazy followers of Krugman, Roubini & Co., you don't deserve any better.
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