By: Barbara Zigah
Investor worries appear to be temporarily assuaged as regards the rescue package for the debt-burdened Greek nation and hedge fund buyers sought the common currency Euro, driving the price up sharply in Asian trading today. Earlier today, the European Central Bank (ECB) said in a press statement that it would make every effort to assist those “dysfunctional” segments of the Euro-zone markets to ensure continued liquidity. The terms of the rescue package include €500 billion in support for those nations facing imminent fiscal peril, and an additional €250 billion pledged by the International Monetary Fund (IMF).
As reported at 12:30 p.m. (JST) in Tokyo, versus the Japanese Yen the single currency Euro was trading at 120.05 Yen, up significantly from 117.78 Yen before today’s announcement and Friday’s late New York trade of 116.43 Yen. Against the U.S. Dollar, the Euro rose to $1.2965 from an earlier low of $1.2790.
Some market players liken the ECB action to a band aid, merely keeping the problem from worsening, at least for the present. One forex dealer commented that, in the short term, the single currency would struggle to rise above $1.3000 and 121.00 Yen because the Greece’s fiscal troubles may be too deep rooted to easily solve.