The Euro earlier gave back gains that had been eked out last week, following the downgrade of the Eurozone’s bailout fund mechanism by Moody’s credit rating agency. Late on Friday, Moody’s said that the Eurozone’s European Stability Mechanism or ESM would be downgraded from Aaa to Aa1 with a negative outlook. The other rescue fund, the European Financial Stability Facility was downgraded from P(Aaa) to (P)Aa1, and Moody’s said that that was a factor of the recent loss of France’s AAA rating.
As reported at 11:45 a.m. (JST) in Tokyo, the EUR/USD pair was earlier trading lower at $1.2973, off the 1-month high of $1.3029 which was struck on Friday. As at 2:19 p.m. (JST) however, the pair had recovered and was trading at $1.3034, off the day’s high off $1.3047. Earlier, the EUR/JPY pair was trading at 107.07 Yen, but the pair rebounded a short while ago to 107.39, yet still off the the recently struck 8-month pea of 107.68.
The Euro is also finding some support from a general improvement in risk appetite following economic data from China which beat expectations. China’s PMI for October struck a 7-month peak with a reading of 50.6, moving firmly into expansionary territory.
Improved Risk Appetite Helps Euro
Barbara Zigah