By: Barbara Zigah
Returning some of yesterday’s gains, the common currency Euro slipped in Asian trading today with investors continuing to have doubts that the rescue package for Greece can be successfully implemented. Many residents of the Greek nation oppose the demands of the austerity provisions of the package, leaving investors to worry that true budget reform is achievable.
Reporting at 12:38 p.m. (JST) in Tokyo, the Euro slipped .2% against the U.S. Dollar’s late New York trade to $1.2763; earlier in the session, the Euro had fallen close to $1.2720, a pre-rescue package low. The Euro also dropped against the Japanese Yen, slipping .5% to trade at 118.56 Yen; in yesterday’s trading, the Euro gained more than 2% on the Yen. Many market players had hoped that the Euro rally would last longer, but as one foreign exchange strategist in Tokyo put it, the weakness in the Euro is “striking.”
Also keeping pressure on the single currency is the fiscal problems in Portugal. Moody’s, the international ratings agency, has recently suggested that it may downgrade Portugal’s sovereign debt. Greece’s debt rating also may be lowered by Moody’s, perhaps as low as the “junk” classification.