By: Barbara Zigah

The common currency Euro slipped to a 2-month low versus the U.S. Dollar in Asian trading today; it struck a new historic low, as well, against the Swiss Franc. These events come on rising investor concerns that the Euro will be further hurt by the growing likelihood of Greek debt restructuring. Last week, Fitch, the international ratings agency, downgraded Greek debt and it was learned that the country of Norway intended to suspend a grant payment to Greece.

As reported at 2:28 p.m. (JST) in Tokyo, the Euro was trading against the greenback at $1.4044, a 0.8% decline, but off the 2-month trough struck earlier in the session. Against the Swiss Franc, the Euro hit a record low, trading at 1.2345 Swiss Francs on the EBS trading platform before rebounding slightly to 1.2378 Swiss Francs. Some analysts predict that, in the near term, the Euro is likely to test below $1.39.

The Greek government remains adamant that they will survive without the need for restructuring of their debt and senior officials of the European Central Bank concur. They insist that the Greek sovereign debt crisis can be overcome by further privatization of debt and by pushing forward with budget cuts and austerity measures. Adding to the Euro’s pressure, local elections held in Spain ousted the ruling Socialists’ party and may make it more difficult for the Spanish government to impose additional austerity measures there if necessary.