Yesterday the Spanish PM released austerity measures to reduce their budget deficit from 11% to 6% in a two years. The plan includes the cut of both public pensions and pay cuts ranging from 5%-15%. This helped strengthen the Euro as investors were pleased to see action being taken to protect Spain from the problems in Greece.
However there are concerns that this could hamper the economy in Spain in the future and therefore the euro as unemployment in Spain is already running at 20%.
For future euro strength against the pound we will need to see other countries put measures into place but without these the euro will continue to be on tender hooks to weaken further.
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