Fri, Nov 18 2011, 18:45 GMT | FXstreet.com
FXstreet.com (Córdoba) - The doubts about the refinancing opportunities for the euro zone countries are increasingly escalating. Sentiment indicators are collapsing on a broad basis thus signalling that market uncertainty is increasingly also affecting the real economy, according to Commerzbank analyst Antje Praefcke.
"The uncertainty on the financial markets is obviously increasingly affecting the real economy, so in the end this gives rise to the question as to whether the euro zone – due to the debt crisis – is heading for another confidence crisis 2.0 à la Lehman", said the analyst. "Not only would this put massive pressure on the euro, but also once again rock the foundations of the financial markets. It is therefore essential that the officials in the euro zone manage to stabilise and eventually restore long term financial market confidence".
According to Commerzbank analysts, until then, risk aversion will remain high and even rise further. "This means that the euro will at best be able to recover only on a temporary basis over the coming weeks, which many market participants will quickly use as an opportunity to sell. As a result the risks in EUR-USD continue to point downwards".
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