Contagion – What is Contagion in forex?

What is Contagion?

Definition of Contagion: It is an experience in which the economic disaster extends from a market to another just like as a disease is transmitted form one person to another. The new debt crisis affecting Europe is regarded as an important case. As the deficit issues and the debt affecting Greece became clear in the regular press, several concerns start taking place like same issues may extend to another “PIIGS” in the Euro zone. It is regarded as a euphemism for Ireland, Portugal, Greece, Spain and Italy. The economies in other member’s states had been in the same manner impacted by the recession and were facing several difficulties in maintaining sustainable recovery. The headlines asked if “Greek Contagion” would stretch to these nations, but the government officers were quickly assessing the problems in every state and all of them were different from the Greek issues.