Euro fears grow as New Zealand and Sweden enter currency wars

http://www.reuters.com/article/2013/05/08/ecb-asmussen-idUSF9N0C301N20130508?feedType=RSS&feedName=financialsSector May 8 (Reuters) - The bailout of Cyprus shows how urgently the euro zone needs to establish a banking union to break the negative feedback loop between weak banks and governments, European Central Bank Executive Board member Joerg Asmussen said on Wednesday.

Cyprus this year became the fourth euro zone country that needed to be bailed out by international lenders, and unlike any other aid deal it controversially forced depositors to foot the cost of recapitalising banks exposed to debt-crippled Greece.

http://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/opening_comment/2013/05/08/Euro_Rises_as_Sweden_Threatens_to_Join_Currency_Wars.html The so-called currency wars progressed further in today’s session, as two new countries jumped on the bandwagon of selling or threatening to sell its own currency to unwind recent strength.

Overnight, RBNZ Governor Wheeler announced that the central bank had already once intervened in Forex markets to bring down the price of the New Zealand Dollar. During European trading hours, Swedish Finance Minister Borg said the Krona’s strength may become an issue for the country’s central bank.

http://www.marketwatch.com/story/radical-fixes-needed-to-make-the-euro-work-2013-05-08 WASHINGTON (MarketWatch) — If you’re ever tempted to think the euro zone has turned the corner and is on the right track, go have a chat with Warren Mosler and he’ll set you straight.

The former hedge-fund manager and an original proponent of what has come to be known as modern monetary theory gave a talk recently at a wealth management conference in Zurich that took a pessimistic view of the euro /quotes/zigman/4867933/sampled EURUSD +0.81%  righting itself on its current path.

“The European slow-motion train wreck will continue until there’s recognition that deficits need to be larger,” Mosler said at the conclusion of his analysis. “The continuing efforts at deficit reduction will continue to make things worse.”