Currency market uncertainty and volatility remains high after the significant events over the weekend. United States credit rating was downgraded from AAA to AA+ with a negative outlook by S & P rating agency on Friday, the European Central Bank activated the SMP purchasing Spanish and Italian bonds in the secondary market, and the G7 issued a statement with promise to take coordinated action of its members to ensure liquidity and to support the financial markets.

The result of the European Central Bank conference was call to belt tightening budgets by Italy and Spain. Furthermore, they made the promise that they will buy the troubled nations debt if necessary. EU strongest nations, France and Germany, also pledged to help push further funding for the Euro-Zone bailout fund through their own parliaments.That promise was totally different from last weeks’ announcement by ECB spokeswoman that they will not buy troubled nations bonds and that help for these two nations will be very limited.
News about bond buying by the European Central Bank initially helped Euro to rise but that rally was short lived.

After the opening of currency markets EUR gained loses compared to CHF and JPY, despite the efforts from both countries national banks.Also, EUR/USD exchange rate was going up and down the charts, and this high volatility is expected to continue in the future period.

In the time of writing this report 1 EUR can be bought for 1.4222 US dollars, 110.38 Japanese Yens and 1.0768 Swiss Francs.

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