The Eurocrats are happy though.
From the Washington Post:
Sean Gallup/GETTY IMAGES - German Chancellor Angela Merkel (center) smiles shortly after casting her ballot along with other Bundestag members in voting on an increase in funding for the European Financial Stability Facility on Thursday....MORE
Euro Sheds Gains
The euro failed to hold above $1.37 for a second straight day Thursday, as currency markets struggled for direction after the German parliament voted to beef up the euro zone's bailout fund.
The single currency traded recently at $1.3624, compared with $1.3545 late Wednesday. The dollar was at ¥76.68 compared with ¥76.60, while the euro was at ¥104.51 compared with ¥103.74. The pound strengthened to $1.5645 from $1.5597 late Wednesday in New York.
The relief was muted in European hours even though German Chancellor Angela Merkel didn't need opposition votes to win approval of the expanded European Financial Stability Facility despite dissent within her ruling center-right coalition.
Analysts said investors continue to worry about Greece's ability to stave off default and whether the latest version of the €440 billion EFSF, agreed to at a euro-zone summit on July 21, will prove effective in containing a debt crisis that threatens to infect the global economy. There is growing talk of allowing the EFSF to borrow from the markets or to insure bondholders against losses.
"People want to know what's next. Are they going to leverage the EFSF or not? Will it require more parliamentary approval? Is this enough? A lot of questions have still need to be answered," said Geoffrey Yu, director foreign exchange strategy at UBS in London.
"The developments since July 21 have virtually rendered that agreement symbolic at best and now we need something more material, something bigger," he said.
Mr. Yu forecast a drop in the euro below $1.30 before year-end....MORE
