The outcome of the Eurogroup meeting did not do well to boost the Euro versus its peers, as conflicts remain among the European leaders on how to address the debt problem Greece. The leaders agreed to give more time for the indebted country to meet austerity targets, and put off financial aid to Greece until they meet again on November 20. The finance leaders also suggested granting an extension to Greece until 2022 to lower its debt/GDP ratio to 120 percent, but International Monetary Fund Director Christine Lagarde pushed that the existing 2020-target should be followed. Economic fundamentals also hurt the single currency as business confidence in the currency union declined, reflecting a waning economy amidst the debt crisis.
Yesterday, ZEW Economic Sentiment declined to 2.6 points, with the debt crisis also taking a toll on the region's largest economy. German ZEW Economic Sentiment declined to 15.7 points as businesses are getting less confident about the economy. Although the German economy is expected to remain resilient, it could still manifest further weakness due to the debt crisis. In Greece, uncertainties continue to pile up as markets await the decision of the Eurogroup on a Greek deal when they meet next week. For a new Greek deal to be reached, some analysts believe that more talks are still likely to take place before its laying down the final details.
In the UK, a report showing that inflation rose in October, is expected to buoy the Pound, adding to signs of the economy's recovery. The housing market also showed an improvement in the previous month as house prices also climbed to -7 points from September's -14 point-reading. Considering that prospects for Britain's economy are much better than in the currency union, a sell bias is recommended for the EUR/GBP pair in today's trades.
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