WSJ News Report exacerbates Euro-Zone Worries

A recent report from The Wall Street Journal newspaper which suggested that the fiscal worries in Greece could spill over to other areas within the Euro-zone, precipitated the Euro’s fall in Asia today.  Late last night, it was reported that some Italian municipalities took out derivative contracts, which if substantiated, could threaten public finances.

Already investors are expressing concern over Portugal and Spain, but if the focus is shifting onto Italy, the Euro will be under significant pressure.  As reported at 4:50 (a.m.) GMT, the Euro was trading lower versus the U.S. Dollar, at $1.3573, off of last night’s N.Y. trade of $1.3607. Versus the Japanese Yen, the Euro declined from 124.10 Yen to 123.45 Yen.

Some market players believe there is still more room for the Euro to decline; some believe that this week the Euro may fall to $1.3500 this week.

The decline in the Euro was also helped along by the IMF’s comments last night that it would sell its remaining gold stock of 191.3 metric tons in the open market.  That statement prompted U.S. Dollar purchases versus high-yielding currencies, including the Euro and the Australian Dollar.  The Aussie slipped from $0.8992 last night to $0.8958 today in Asia.