By: Barbara Zigah

Once again, troubles in the Eurozone have precipitated the Euro’s tumble. Greece, of course, is at the forefront as investors worry that the country will be unable to meet its September debt obligations thus pave the way toward the approval of the next tranche payment of the emergency bailout fund. The ratings downgrade of Italian debt by Standard & Poor’s also is weighing heavily on the single currency. While the ratings downgrade was expected, it was surprising only because it was S&P rather than Moody’s which made the cut; markets now expect Moody’s to quickly follow with their own downgrade.

As reported at 2:38 p.m. (JST) in Tokyo, the Euro was trading against the greenback at $1.3619, moving closer to the 7-month trough of $1.3495 which was struck last week. Analysts say that if it breaks that level, it could then test $1.3410.

Investors quickly moved away from higher risk currencies; the Australian Dollar briefly struck a 1-month low against the U.S. Dollar, trading at $1.0148, a decline of 0.6%, before recovering. Sao safe haven currencies benefited; the Euro slipped 0.3% against the Japanese Yen, trading at 104.45 Yen, just off the 10-year trough of 103.90 Japanese Yen, struck last week.