Global shares, commodities as well as euro soared following euro zone finance ministers approval to lend $125 billion to Spain relieving markets which were afraid of a financial collapse.
The relief might be temporary though, because all eyes are now on the results of Greek election on June 17 which might decide fate of Athens regarding its future relations with Europe.
The euro increased roughly 1% to $1.26694, before moving back to $1.2627. The Australian dollar increased to $1.0005, before moving back to $0.9970. The 17 countries of Euro zone approved lending of about $125 billion to Spain in order to rescue its banks. Exact amount is not yet known. Spain said that it required time for evaluation of capital requirements of its banks, which will be disclosed within 2 weeks.
The rescue package is the 4th after 2010, following bailouts for Ireland, Portugal and Greece. Analysts predict sudden surge in stocks, commodities and some other riskier investments. It is generally suggested that bailout for Spain indicate that European leaders attempt to avoid euro zone troubles spreading and creating uncertainties in global financial markets as well as endangering the world economy. Currencies especially euro is expected to increase in value by a big margin.
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