By: Barbara Zigah
In Asian trading today, the Euro rose against the U.S. Dollar, up off a 3-week low as growth projections eclipse investor concern of a worsening debt crisis. As reported at 3:11 p.m. (JST) in Tokyo, the Euro traded against the greenback at $1.4214, off from $1.4192 in late New York trading. Yesterday, the common currency had fallen to $1.4172, the lowest price in three weeks attributed primarily to concerns that the Greek fiscal problems will result in debt restructuring rather than additional aid.
Recently, Standard & Poor’s, the rating agency, downgraded Greek debt two notches to B, essentially junk status, citing the increasing likelihood that Greek debt would eventually need restructuring. S&P also cautions that they may downgrade Portuguese debt if the country’s banks don’t meet capital requirements or if the aid sought is larger than anticipated.
Markets are expecting that the Eurozone’s growth report, to be released tomorrow, will show that the Eurozone grew 2.2% annualized during the first quarter, an increase of 0.2% from the 4th quarter of 2010. According to one market analyst in Tokyo, investors see that Eurozone data has improved, and the rate differentials between the European Central Bank and the Federal Reserve are supporting the Euro.