Germany gambles

The economic package announced by German Chancellor Angela Merkel will have forex traders trying to predict whether this action will strengthen or weaken the Euro? Should a fall occur, where will it stop? The pound’s descent into oblivion could be mirrored by the Euro.

Likewise what influence will the financial package have upon the global foreign exchange markets in general? The package is a generous one with a 50bn injection (£45bn) to kick-start Germany’s flagging economy.

In addition to these measures the German government has announced more investment in railways, roads and schools including initiatives on tax relief. The plan is aimed at pulling the country up and out of recession but whether it works or not remains to be seen.

This is not the first time the Germany Chancellor has announced a rescue package, she announced one last month only to be derided for being too cautious. The deal has been hammered out despite cross party quarrelling and could see a stem of the job losses already suffered by the Germans.

This seems quite a gamble by Germany as their biggest problem, exports, has seen businesses fall by the way side no matter how much money is pumped into the economy. Spread betting businesses will have to decide whether this gamble will pay off or make little difference.