By: Barbara Zigah
The Euro’s downtrend continues, and the beleaguered single currency is approaching a 14-month trough against the U.S. Dollar on investor concerns over the pace of the Euro-zone’s economic recovery. As reported at 2:35 p.m. (JST) in Tokyo, the Euro was trading at $1.2545 against the U.S. Dollar, a .1% increase from yesterday’s New York levels. Market players insist that if the Euro moves below $1.25, then stop-loss selling may push it farther down to levels not seen since October 2008, when it struck $1.2330. The Euro enjoyed limited gains against the Japanese Yen, trading at 116.50 Yen, a rise of .2%.
The Euro’s outlook in the short term continues to be bearish. Investors and analysts alike are worried that fiscally troubled E.U. members do not have the resolve and commitment to see real improvement in their economies. Another concern is that fiscal tightening may slow the economic growth of the Euro-zone nations as a whole, though the president of the European Central Bank, Jean-Claude Trichet, rejected that assumption as a fallacy.
Gains in the U.S. Dollar were boosted, in part, by investors shunning the Euro. One economist noted that the U.S. economy’s decent rebound and the general disdain for the Euro are driving the greenback’s upward trend. The U.S. Dollar Index, a measure of the greenback’s value versus a basket of major currencies, rose .1% to trade at 85.33 .DXY, close to a 13-month peak struck earlier this week.