Flash: Portuguese pandemonium – Investec

FXstreet.com (New York) - “Portuguese political upheaval continues today as austerity fatigue has lead to the resignation of several key ministers and we could now be looking at the possibility of early elections on the western coast of the Iberian Peninsula.” warns Lee McDarby, Corporate Treasury at Investec.

Bond spreads, which were the buzz phrase of the last European crisis, are widening sharply and such headlines are never going to be good for the single currency. According to McDarby, “If we see a recovery back above 1.3000 in the EUR/USD then expect the euro to ride this current blip out, although if we see a continued weakening of the currency then we could be in for the next wave of euro selling.”