QuantumTom

Below its 200-day moving average the EUR has breached the floodgates. To what or to where is the million dollar question. The fear that Greece’s budget deficit woes cannot be contained and possibly filter throughout the region has unnerved investors and increased risk aversion actions. The US sub-prime debacle started this way, small, ballooned and morphed within the banking industry. Even the European finance ministers have increased the heat on the Greek government to step up its budget-cutting efforts. With Chinese’s bourses falling for a third consecutive day after news that regulators have told banks to restrict further lending has, by default, increased the demand to own the world’s ‘reserve currency’ the dollar for surety reasons. We are back to buying dollars and wearing diamonds for the time being at least.

via China Chokes Credit while EUR plummets | OANDA Forex Blog.