As analysts had expected and as markets had feared, the E.U. finance ministers meeting yielded no definitive outcome and highlighted only the shortcomings of the most recent summit. As a result, the Euro is lower and holding close to a 2-year trough, trading against the U.S. Dollar at $1.2294, a dip of 0.2%, but not far off the $1.2225 low hit yesterday on the EBS trading platform. The only positive from the meeting thus far is the agreement to give Spain until 2014 to meet its E.U.-imposed deficit targets.
Risk appetite was also generally diminished; the Australian Dollar fell against its U.S. counterpart, attributed to some extent to China trade data which disappointed markets. The data showed that imports grew only half as quickly as expected, a picture which underscores concerns about China growth. China is Australia’s premier trading partner and any event which affects the health of the Chinese economy weighs heavily on the Australian Dollar. As reported at 11:09 a.m. (JST) in Tokyo, the AUD/USD pair was trading 0.3% lower at $1.0173. Last weekend, coming just after a PBOC rate cut, the Chinese Premier suggested that the government would be considering additional fiscal and monetary measures which would stimulate the economy.