By: Barbara Zigah
The common currency Euro remains close to a 7-week trough against the U.S. Dollar in Asian market trading; as reported at 1:59 p.m. (JST) in Tokyo, the Euro was trading up .1% on the day at $1.3500, but remains within striking distance of the $1.3446 low struck yesterday on the EBS trading platform.
Since early November, the Euro has seen its value slide against the greenback by nearly 5%, with much of that loss attributed to investor concerns over Eurozone sovereign debt. Ireland remains the markets’ focus this week as, despite efforts by finance ministers in the Eurozone, Dublin refuses to be coerced into accepting a bailout package. Meanwhile, the IMF and the Eurozone finance ministers continue to lay out a rescue plan for the Irish banking sector, should Ireland ask for aid.
Further helping the U.S. Dollar’s rally were comments from Federal Reserve Bank officials who warned that the Fed will take additional action if the economy warrants it, and that the current plan to inject $600 billion of liquidity was a good start.
In direct opposition to the Fed’s QE scheme are two Republican congressmen who are demanding that the Federal Reserve focus solely on controlling inflation, instead of tackling the mandate of full employment and price stability. The U.S. Dollar Index, a measure of the greenback’s strength versus several major currencies, held at 79.194 .DXY, slightly off yesterday’s 7-week high of 79.461 .DXY.