By: Barbara Zigah
The European Central Bank released its semi-annual stability report late yesterday, which noted significantly that Euro-zone banks will likely face an additional multi-billion Euro write-down in the second half of 2010 and throughout the 2011 calendar year, potentially reaching a net-loss as high as €195 billion.
This report, combined with news that Argentina’s debt restructuring was delayed to allow European investors the opportunity to join in the swap deals, has pushed the Euro lower against the U.S. Dollar in Asian trading. As reported at 2:50 p.m. (JST) in Tokyo, the Euro fell from $1.2301 in overnight trading to $1.2269 in the Asian market. The Euro also slipped against the Japanese Yen, trading at 111.72 Yen, from 112.40 Yen overnight. As financial markets in the United States and United Kingdom resume trading today after their respective holidays, the Euro is on a course to slip even lower, according to some traders.
The Australian Dollar also fell against the U.S. Dollar and Japanese Yen, on speculation that the Australian central bank will not soon be raising their benchmark interest rate. The statement that the RBA monetary policy was appropriate in the near term followed the release of economic data showing that new home construction was down in April. The Aussie slipped against the greenback to $0.8398, a loss of .7%; against the Japanese Yen, it traded at 76.47 Yen, a fall of 1%.