Most major currencies traded narrowly today; the Euro struggled to advance while the Japanese Yen found support as global economic pressure increases and investors are paying attention to the forthcoming interest rate decision by the European Central Bank. Investors expect that the ECB will have to reduce interest rates today in order to curb inflation in the Euro Zone.
The state of the economy in the Euro Zone and the public finances in the Zone has come under sharp focus with the possibility that Standard and Poor, the global rating agency, might soon lower the credit rating on the sovereign debt of Greece. According to analysts, this stoked fears that other members of the Euro Zone debt may also be downgraded.
According to some analysts, the economic outlook of Ireland is not good, however the country’s Prime Minister denied a report that its country is in the process of calling on the IMF for economic help.
This week’s data showed that Germany's economy, the largest in the Euro Zone, in 2008 grew at its slowest rate in three years. According to the data, the Germany economy thinned by between 1.5% and 2.0% in the 3rd quarter of last year.
The Euro was flat and traded at $1.3169, hovering near $1.3093, the lowest trading price in a month. However, it was down by 0.2% versus the Japanese Yen and traded at 117.07 Yen. The Japanese gained 0.2% against the U.S. Dollar and traded at 88.89 Yen.