By: Barbara ZIgah
Standard & Poor’s, the international rating agency, yesterday downgraded Spain’s sovereign debt adding to investor concerns that a debt crisis within the Euro-zone is rapidly widening. Downgrades on Tuesday of Portugal and Greece debt had sent the Euro broadly lower, however, the common currency managed to edge up slightly versus the U.S. Dollar in Asian trading today. As reported at 1:50 p.m. (SGT) in Singapore, the Euro traded against the greenback at $1.3218, a slight rise from late Wednesday’s trading in New York when it struck $1.3203. Some analysts speculate that the Euro will slip well below the 1-year low trade of $1.3114, struck yesterday following the Spain downgrade announcement. One analyst in the U.K. suggested that the rescue package for Greece may be a long time in coming given not only the technicalities of such a package, but the political climate in Europe, and in particular Germany, which will be holding regional elections next month.
In the United States, the Federal Reserve Bank yesterday reiterated its position that interest rates would remain at their current lows over an extended period of time. The tone of that statement raised speculation, however, that the Federal Reserve might raise their Federal Funds rate sometime after June. The U.S. Dollar Index was trading at 82.254. DXY, off of late Wednesday’s trade of 82.292 .DXY.