As Eurozone Worries Remount, Euro Slips Broadly

 By: Barbara Zigah
 
Resurfacing investor fears as to whether Ireland’s government will be able to repay sovereign debt and lower its deficit are having a detrimental effect on the Euro, which today struck a 6-week trough against the U.S. Dollar. 

As reported at 2:37 p.m. (JST) in Tokyo, the common currency slipped to $1.3600, a .5% decline from late New York trading.  This week alone, the Euro has lost about 3% of its value against the greenback, and dipped as low as $1.3590, with one forex manager in Tokyo commenting that sentiment has turned weaker since the Euro broke through the $1.37 barrier. 

The Euro also traded lower against the Japanese Yen, slipping .6% to 112.06 Yen.  The Ireland government recently proposed a 4-year austerity program aimed at reducing its deficit to 3% of GDP; following a poll of economists, however, clearly two thirds believe that within a year’s time the Irish government will turn to the IMF for help.
 
The U.S. Dollar, a measure of the greenback’s strength versus major currencies, has gained nearly 3.5% trading at 78.43 .DXY since it struck the 1-year low established last week.  The greenback has been benefiting from investor unwinding and as the Eurozone problems are resurrected.