Euro has plummeted below the 1.28 level against the US dollar today as concerns pile up. The latest French bond auction saw higher borrowing costs, and there are renewed concerns about a credit rating downgrade for country. On top of that, Italian banking weakness remains.
It is no surprise that the euro is struggling so much today, reaching lows not seen against the Japanese yen in 11 years, and reaching more recent lows against the US dollar. Indeed, the eurozone is so dominating the markets today that even solid economic data in the United States is being completely ignored.
Yesterday’s UniCredit SA scare remains ingrained in the minds of Forex traders, and today’s French auction isn’t helping matters. On top of that, there will be an EFSF auction tomorrow, and there are worries about how that will go. In the midst of all this uncertainty, European leaders appear powerless to find solutions to the problems. While creditable rumors of a eurozone breakup have yet to be heard, there are some whispers to that effect.
At 15:19 GMT EUR/USD has gained a little more ground, but is still lower at 1.2803, down from the open at 1.2941. EUR/JPY is down to 98.6610 from the open at 99.2865. EUR/GBP is down to 0.8270 from the open at 0.8286
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