Euro Rally Seen Waning on Greek Downgrade

By: Barbara Zigah

Profit taking by investors and the downgrading of Greece’s sovereign debt to junk grade status is slowing the momentum of the recent Euro rally. In Asian trading today, as reported at 2:32 p.m. (JST), the Euro was trading against the U.S. Dollar at $1.2204, a loss of .1% from yesterday’s late trading in New York; on Monday, the Euro struck a daytime peak of $1.2298 on the EBS trading platform. The common currency also slipped against the Japanese Yen, trading at 111.70 Yen, a loss of .2%. Market players are suggesting that the Euro’s current resistance can be attributed to the Greek downgrade, though there is anxiety as well for other struggling Euro-zone nations.

Also in Asia, the reading of the minutes from the Australian Reserve Bank’s recent policy meeting showed that interest rates in the short term would remain unchanged. The central bankers indicated that are taking a wait-and-see approach to determine if additional rate hikes are needed in light of recent Euro-zone debt problems, but the recently released positive economic data from Australia did not warrant another increase. Against the U.S. Dollar, the Australian Dollar slipped to $0.8564, a loss of .2% from yesterday’s 1-month peak of $0.8665.