By: Barbara Zigah
Continuing worries about the Eurozone’s peripheral debt has kept the common currency under pressure in Asian trading today. The Euro has slipped against the U.S. Dollar to the lowest level in more than week, trading at $1.3886, a decline of .2%. Versus the Japanese Yen, the Euro slipped .7% to 112.24 Yen, following yesterday’s loss of .8%; the Euro also struck a new 2-month low versus the Australian Dollar, trading at AU$1.3692.
Much of the Eurozone concern is focused on Ireland, with many analysts and market players worried that, despite assurances to the contrary, they will be unable to slash the budget deficit and still grow their economy. The 10-year bond spread between Irish and German treasury bonds has more than doubled over the past several months, with investors demanding a premium to hold the higher risk Irish note. One currency strategist believes that once the Irish government publishes its 4-year strategy to reduce the deficit sometime this month, that investors will have some of their worries allayed.
The U.S. Dollar edged .4% lower against the Japanese Yen, trading at 80.83 Yen, still within striking distance of the 1995 historic low. Markets continue to remain jittery over worries that the Japanese Ministry of Finance will intervene should the Yen gain too much strength.