As we enter the new year, Estonia has become the newest country in the EU to adapt the Euro as their national currency. Unfortunately for the Eurozone, this will seem to come at hit to the Euro’s value. Financial Times reports that there was an immediate drop found on the Euro in correlation to not only the dollar, but the yen and the pound. The pound had a large drop with the US dollar. Japan has stated that they support the dollar, as their yen gained tremendous value over the dollar in 2010.
Forex traders have stated that they do not believe that the drop in the Euro was due to Estonia. This past year has really put doubts within the Euro, and though there was minor growth by the Euro towards the US dollar at the end of 2010, the strength of support by investors is not completely there. It should be interesting how the rest of the year develops for the Euro and the US dollar.
References: Financial Times. http://www.ft.com/cms/s/0/0e1b1ca0-1730-11e0-badd-00144feabdc0.html#axzz1A1d5j4l6
(Post by Evan Amano)
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