BY: Barbara Zigah
For the second consecutive day, the Euro declined against the U.S. Dollar and the Swiss Franc as investors focus is being drawn to recent data suggesting that Eurozone growth is slowing at a faster than expected pace. Investors are worried that policymakers’ various attempts to control inflation and shore up troubled Eurozone economies are having a detrimental effect on growth in the region.
As reported at 3:05 p.m. (JST) in Tokyo, the Euro rebounded slightly against the greenback from an intra-session low of f$1.4161 to $1.4165, overall a 0.6% decline. Against the Swiss Franc, the Euro dropped some 1.6% to 1.09877 Swiss Francs. Similar sentiment also pushed the Euro lower against the safe haven Japanese Yen, losing 0.5% to trade at 109.44 Japanese Yen. The Japanese Yen is in danger of overheating, and the Japanese Finance Minister earlier cautioned markets that the currency is closely being watched, suggesting that an intervention by the Bank of Japan may be soon forthcoming.
Among commodity-linked currencies, the Australian Dollar tumbled against the U.S. Dollar as the Reserve Bank held their key interest rate unchanged at 4.75%, this then marking the 8th consecutive month at that rate. Markets had been anxious for a rate hike, but the RBA Governor cited acute market uncertainty as the reason to keep the status quo.