By: Sara Patterson
As Greece continues fighting against its possible debt default, the Euro weakened for a second straight day against the US Dollar. The common currency also struggled against the Yen, reaching a near 10 year low against the Japanese currency. In London trading today, the Euro weakened 1% against both the Yen and the Dollar, to 104.88 Yen and $1.3661 respectively. The Dollar Index advanced 0.8 percent to 77.126.
One likely cause for the weakening of the Euro is the continued struggle of the Greek government to reign in its debt crisis. Despite hopes for a practical prevention of its default, Greece remains in trouble following a two-day meeting of EUR finance ministers in which it was concluded that the troubled country has made sufficient progress in protecting itself from default. International lenders warned the country that it must increase tax collection and shrink its public sector as a way to avoid default in the coming weeks, and that failure to do so would surely cause a devastating outcome. In advance of an anticipated 8 billion dollar IMF bailout expected in October, Greece will be required not only to plan for economic improvement, but to take genuine steps in the right direction, as dictated by the IMF. The Greek cabinet will be meeting shortly to discuss austerity measures that may help.
European stocks also fell today as a result of the speculation that Greece may not be able to meet the demands imposed upon it. This market movement put an end to a four day rally of the Stoxx Europe 600 Index.