By: Barbara Zigah
The Euro slipped lower in Asian trading today as Moody’s credit rating agency put Spanish debt under review with the possibility of a downgrade from their current AA1 rating. As reported at 3:17 p.m. (JST) in Tokyo, the Euro traded at $1.3309 against the greenback, a loss of .5%; against the Swiss Franc, the Euro traded at 1.2808, approaching the September record trough of 1.2765 Swiss Francs.
While analysts suggest that the Spanish downgrade should not come as a surprise, it just brings the entire focus back to the Eurozone and the escalating fiscal crisis there.
In the United States, improved economic data helped to boost U.S. Treasury bond yields. The yield on the 10-year note rose to a 7-month peak at just slight above 3.50% before retreating to 3.414% later. It was reported on Tuesday that, for the 5th consecutive month, retail sales in the United States rose in November. Yesterday’s announcement by the FOMC that the current monetary policy will continue unchanged, was generally expected, though many had hoped that the recently improved economic conditions might warrant some modification of the Fed’s stimulus program.
The U.S. Dollar moved higher against the Japanese Yen, trading at 83.85 Yen, an increase of .2%. Consumer price data for November is due out later today, and one strategist in France cautioned that if the news is positive, there is a strong likelihood of widening spreads between U.S. and Japanese rates.