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Euro 'has managed to regain its footing'

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Euro 'has managed to regain its footing'

Officials in the eurozone may be beginning to make progress on overcoming the region's debt crisis, experts have suggested.

According to foreign exchange specialist HiFX, bond yields in Spain and Italy have "tentatively eased", while the euro has "managed to regain its footing having tested the psychological 1.20 level".

Chris Towner, director of FX advisory services at the group, said this suggests Europe is "finally getting its act together", as the region's debt crisis has dragged on for three years.

He argued that decisions made by Germany and the European Central Bank (ECB) are particularly critical at the moment, as the financial markets are not willing to respond to "empty promises".

Mr Towner said this may explain why Mario Draghi, the governor of the ECB, last week insisted the organisation will do "whatever it takes" to safeguard the future of the single European currency.

He compared Mr Draghi's speech, which was well received on the financial markets, to Clint Eastwood's character in the movie Dirty Harry, as he too made assurances he would go to whatever lengths are needed to resolve the crisis he faced.

Mr Towner noted that the fact Germany has "backed up" this statement has proved to be particularly important, as investors are "now paying attention" and waiting to see commitment turning into "real action" from the ECB.

This, he said, could involve the financial institution "tackling the excessive borrowing costs by buying bonds in the direct market".

Mr Draghi acknowledged last week that the euro faces a number of challenges at the moment, including liquidity problems across Europe and failings within the interbank market.

However, he insisted any steps the ECB takes to preserve the single European currency would be enough to safeguard its future. Mr Draghi also stressed that the euro is actually in a "much, much stronger" position than many people will readily acknowledge.

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