Doubt over Policymaker’s Inadequate Response Pushes Euro Near 8 Month Low

Barbara Zigah

By: Barbara Zigah

Disappointment in what they already perceive as an insufficient response to the Eurozone crisis, in the Asian trading session, investors have pushed the Euro close to an 8-month low against the U.S. Dollar. Across the board, riskier assets were being hammered as new details on the Eurozone’s policy makers latest attempts at stemming the contagion come to light.

First, there was the rumor that the EFSF was to be beefed up, and that the E.U. policy makers had considered new measures that would ring-fence the debt-ridden sovereigns, specifically Greece, Ireland and Portugal; those rumors helped to push the EUR/USD pair to 1.3585, but that price was short-lived at the Asian opening.

The problem is that the plans, though seemingly a credible solution, are only at the “rumor” stage, says one economist in Australia. Thus, until confirmation the Euro will be under significant pressure. It’ is likely to face tough hurdles, including the strong possibility that Germany will not soon approve the next Greek emergency bailout trance payment. Earlier, the deputy finance minister of Germany said that Greece would likely several weeks until a decision on the bailout is made.

As reported at 12:31 p.m. (JST) in Tokyo, the Euro was trading at $1.3429 against the greenback, a decline of 0.5%; support for the common currency is seen at $1.3418, and major resistance neat $1.3585. 

Barbara Zigah

After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.

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