The single currency continues to struggle against the forces generated in the periphery. Ireland once again distinguished itself this morning, got an extension on the yield spreads to fresh highs on a ten-year bonds. Now they are above 560 points, and the ECB is the only buyer in the market at the moment. In addition, the news this morning that Ireland is likely to expand the program of bank guarantees (deposit insurance of retail and corporate clients) only added to fears. As we mentioned earlier, the key issue is the reaction of managers on reserves at the latest developments. Recent months, the euro benefited the desire of managers to diversify their reserves away from investing in the dollar. Some also invest in debt peripheral eurozone, but the situation in Ireland speaks about the dangers of such decisions, especially when there is sufficient liquid reserves.
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