Euro Retreats off 2-Month Highs on Profit-Taking

By: Barbara Zigah

Investor profit taking brought the Euro lower against both the Japanese Yen and U.S. Dollar in Asian trading today; on Friday, the common currency struck a 2-month peak versus the U.S. Dollar. As reported at 1:57 p.m. (SGT) in Singapore, the Euro was trading against the greenback at $1.2902, off from the $1.2927 traded in New York on Friday. Against the Japanese Yen, the Euro traded at 111.81 Yen; Friday’s New York trade was 111.95 Yen.

Analysts predict that the Euro may fall lower still, based on indications that the American economy’s recovery is stagnating. Adding to the Euro’s woes are escalating problems in the Euro-zone. This past weekend, IMF and E.U. negotiators, in a talk with officials from Hungary which, it is expected, will be joining the E.U. within the next few years, reached an impasse over the implementation of budget cuts sand austerity measures.

The results of European Union banking stress tests will also be released later this week, and markets will be assessing the validity of the tests as regards issues of potential restructuring of sovereign debt. Ninety-one banks from the Euro-zone, representing nearly 65% of the zone’s banking assets, were put under scrutinization.