Covering short euro positions now is one thing. Taking long positions in the single currency is entirely another.
It is why this little euro rally won’t last. The latest bout of short-covering is hardly surprising given the extreme level of speculative short positions, talk that Germany may yet allow Spain to get a soft bailout and signs that major central banks may start to ease policy again.
It is the two “mays” [...]
by Robert Skidelsky
Europe is now haunted by the specter of debt. All European leaders quail before it. To exorcise the demon, they are putting their economies through the wringer.
It doesn’t seem to be helping. Their economies are still tumbling, and the debt continues to grow. The credit ratings agency Standard & Poor’s has just downgraded the sovereign-debt ratings of nine eurozone countries, including France. The United Kingdom is likely to follow.