As we approach the end of the first month of 2012 it seems that the ongoing saga of Greece continues to weaken the euro.
The initial discussions between Greece and its Creditors was setback yesterday as a disagreement of yields on future bonds failed to table a deal.
Nevertheless the euro still continued a mild rally as Spain managed to get through its bond auction with lower yields than previously.
Eurozone economies will be not be pleased with Standards & Poors downgrade of three major French banks, with reports stating Société Générale and Crédit Agricole were cut to "A" from "A+", while Caisse des Depots et Consignations was dropped to "AA+. BNP Paribas also suffered.
The International Monetary Fund (IMF) expressed further concerns, predicting that the economic crisis in Europe poses a global threat, which will certainly impact on investors who are constantly being drawn away from Europe.
The IMF released a report on Tuesday which cut its growth forecast for the global economy to 3.3% in 2012, down from an earlier forecast of 4%.
The only economy’s GDP that has not been cut surprisingly is the USA.
Mervyn King has already predicted the UK to have a long and arduous recovery and also said that recently "The United Kingdom is still borrowing from the rest of the world. If, as a nation, we are to reduce that borrowing, we must export more and import less."
Institutions named in this article:
IMF: The International Monetary Fund - An organization of 187 countries, aimed at fostering global monetary cooperation, secure financial stability, to promote international economic cooperation, international trade, employment, and exchange rate stability.