By: Barbara Zigah
After the Slovakian parliament rejected the amendment which would bolster the firepower of the Eurozone’s emergency fund, the EFSF, the common currency fell broadly in Asian trading, reversing much of the gains made in the recent corrective rally. As reported at 12:22 p.m. (JST) in Tokyo, the Euro was trading 0.3% lower against the U.S. Dollar at $1.3593. Against the Japanese Yen, the Euro slipped 0.2% to 104.24 Yen, well off the 10-year low of 100.77 Japanese Yen struck last week.
Slovakia is the last of all of the Eurozone members and its first vote on the EFSF amendment was seen as so much political posturing. A re-vote will take place later in the week, and most believe passage is now assured as the country’s main opposition party is signaling that they will support the measure following the resignation of several key governmental officials.
Analysts believe that, at least over the next week or so, the Euro will see subdued price movements as investors await the opportunity to review the recently crafted plans for the Eurozone that were being worked on by Germany and France. Markets are also waiting to learn whether or not Greece will receive the next bailout tranche payment; the “troika” has confirmed that it is likely but not definitive, as the Greek government’s various fiscal pledged have not yet been met.