High Risk Currencies Feel the Pressure

By: Barbara Zigah

The Euro strayed near to a recently struck 3-month low during the Asian trading session as investors worry that political uncertainty in the Eurozone may jeopardize plans to tackle the debt crisis there. In Greece, the newly elected Left Coalition party said that Greece’s previous commitment to the E.U./IMF bailout plans were null and void, leaving investors to worry that the country won’t be able to meet maturing debt obligations and will be compelled to leave the Eurozone as a result.

As reported at 12:19 p.m. (JST) in Tokyo, the Euro was trading at $1.2969, a 0.3% decline and just off the 3-month trough of $1.2955 struck on the EBS trading platform on Monday. One analyst expects the bearish downtrend to continue with $1.28 ultimately in sight within the next few weeks.

Other higher risk currencies were also under pressure including the New Zealand Dollar which fell against the U.S. Dollar at one point in the session to a low of $0.7843 before recovering to $0.7849, still an overall decline of 0.4%. The Australian Dollar also tumbled below a 4-month low, striking $1.0053 earlier, before recovering more recently to $1.0064. The Aussie is also lower against the safe haven Japanese Yen, trading at a 4-month low of 80.40 Yen.