By: Barbara Zigah
The common currency Euro struck a new 2-month trough versus the U.S. Dollar in Asian trading today following the Standard & Poor’s decision to lower the long term sovereign debt rating on Ireland from AA to A; the country’s short term debt rating was also lowered.
As reported at 2:17 p.m. (JST) in Tokyo, the Euro traded against the greenback as low as $1.3359, the lowest price since late September before rebounding to $1.3401 a short while later. One dealer said that the markets had already factored the debt downgrade into the Euro’s pricing so investors took the news in stride and used the drop to buy their position back.
Some market players see the Euro heading back to the $1.3500 range by weeks’ end, though it remains under heavy pressure as a result of peripheral Eurozone debt, most especially coming from Spain and Portugal which are facing problems similar to those in Ireland.
The Euro moved higher against the Japanese Yen, trading at 111.57 Yen, up from the 111.19 Yen traded in New York late trading. The U.S. Dollar also rose slightly versus the Yen, trading at 83.16 Yen; investors see the greenback trading narrowly over the next few sessions; they point out, however, that the violence in Korea could have be detrimental to the Yen.