Morning Note: Rate Hike to Be the Euro’s Death Knell?

The euro hit a fresh 52-week high against the dollar Wednesday morning on expectations that the European Central Bank will announce a 25 basis point rate hike after its meeting tomorrow.

But will a rate hike ultimately be the death knell for the shared currency?

That was a question Fast Money Contributor Dennis Gartman was prepared to answer on Wednesday during the Fast Money Halftime Report.

Gartman, who has called for a breakup of the euro in the past, believes the rate hike may ultimately push peripheral European countries to leave the shared currency. Portugal, Ireland and Spain, he said, need a weak currency to help aid their debt-laden economies. A stronger Euro benefits Germany and France, who are concerned about runaway inflation, not the weaker European nations, he said.

“If I were the Portuguese, I would be voting to drop out. I need a weak currency,” said Gartman, author of The Gartman Letter.

Gartman, who manages funds that are short the Euro, cautioned that it is unlikely any European country will drop out of the Euro in the next several months. However, he stressed that the rate hike undermined the value of a shared currency for peripheral nations.

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