By: Barbara Zigah
In a subdued trading session as a result of holidays in both U.S. and U.K. markets, the single currency Euro moved higher versus the U.S. Dollar; as reported at 3:13 p.m. (JST) in Tokyo, the Euro traded at $1.2315, a slight gain of .3%, though earlier in the session it had reached a peak of $1.2332 on the EBS trading platform. Given the current track, the Euro is expected to have lost more than 7% versus the greenback this month alone, marking the biggest decline as a percentage since January 2009, and the 6th consecutive monthly fall. While the market mood is stable today, one trader said he expects another month of volatility given the escalating debt problems within the Euro-zone nations.
Bolstering that presumption, the sovereign debt of Spain was downloaded late last week. Fitch Rating Agency downgraded Spain to AA-plus, commenting that the austerity measures would mute the country’s economic recovery. France also acknowledged this weekend that retaining its current AAA credit rating might be difficult without implementing some austerity measures of its own. There are also indications that Germany may implement a tax hike to help lower its deficit.
Later this week, the G20 meeting of central bankers and finance ministers will be meeting in South Korea, where the focus is expected to be the European debt crisis, among other things.