The euro has just touched a new record low for 2010 versus the greenback and the yen on speculations that Greece will suffer its first credit downgrade this year, which would follow the two previously suffered last year as the southern European nation started to agonize with its growing budget deficits.
After Standard & Poor’s announced that Greece may be subject to another downgrade on its credit rating following its aggravating fiscal crisis as both ECB and Greek officials’ lack of problem-solving skills are affecting confidence among traders that the euro is in fact a stable currency, and the Eurozone a safe and attractive destination for overseas investments. The Japanese yen was the biggest winner versus the euro, as the return of risk aversion made it easy for the Asian currency to be among the most bought currencies in Forex markets this week, but also on speculations that Japanese exporters took long positions of its nation’s currency today.
At this point, with Greek and EU officials accusing each others of negligence and wrong choices, it’s easy to imagine that the black tide for the European single currency will flood global markets with pessimism. New record lows for the euro are likely to follow.
EUR/USD traded at 1.3459 as of 4:44 GMT from a previous intraday rate of 1.3539. EUR/JPY bottomed at 120.65 from 122.11.
Source: Dailyforexnews.info
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