By: Barbara Zigah
Even as investors concerns over the continuing sovereign debt problems of the Eurozone weigh, the common currency Euro rose against the U.S. Dollar in Asian trading, coming off of last week’s 7-week low. As reported at 1:42 p.m. (JST) in Tokyo, the Euro traded 0.2% higher against the greenback, at $1.4272. According to one forex manager in a Japanese bank, the Euro is in correction mode, and is likely to retreat once corrective buying has concluded. Separately, one currency analyst noted that the Euro, currently at 1.4268, is likely to test the $1.4325 moving average in the near term.
Investors are clearly being realistic when it comes to the Euro, knowing that the region’s debt problems are a long way from resolution. European finance ministers earlier this week approved a bailout loan for Portuguese debt which prompted some buying back of the common currency, but the issues of Ireland’s interest rate modification and Greek debt remain on the table. One Eurozone policymaker acknowledged that Greek debt restructuring is a possibility, the first such official declaration of that likelihood, an event which could add to the Eurozone’s fiscal worries.