By: Barbara Zigah
The common currency Euro held close to a 1-month peak against the U.S. Dollar in Asian trading today, as market players speculate that the current gains are likely limited, and can be attributed to last week’s short covering. In the long term, investors insist that the European policymakers must come up with some clear-cut answer to providing a safety net for the highly indebted Eurozone nations that are seeking assistance.
Later, today, a meeting of finance ministers from the Eurozone will be held in Belgium and investors expect the discussion to focus on raising the bailout accounts funding balance, which is seen as inadequate when and if Portugal and/or Spain should seek aid.
What is weighing very heavily on the common currency is whether or not the government of the Eurozone’s largest economy, Germany, will support a funding increase; in the past, the German Chancellor has dismissed the suggestion saying it was unnecessary, but in recent days has softened her tone somewhat.
As reported at 2:26 p.m. (JST), the Euro traded at $1.3332, a loss of .4% but still not too far off the $1.3458 1-month peak struck on Friday. The Euro also slipped against the Japanese Yen, trading at 110.54 Yen, a .4% decline and off of Friday’s 110.99 Yen 1-month peak.