By: Barbara Zigah
The common currency Euro weakened slightly against the U.S. Dollar in Asian trading following the downgrade of Portuguese sovereign debt. Most players noted that the downgrade by Moody’s to A3 was generally well accepted by the markets, whose focus still clearly remains on the unfolding events in Japan.
Most investors were expecting the Portuguese debt downgrade, so it came as no surprise. One currency strategist in the U.K. noted that investors’ perception of the European debt crisis has been improving now that definitive steps are being taken by the European Union to flesh out a long term rescue plan for the fiscally troubled E.U. nations.
Market Watch
As reported at 2:15 p.m. (JST) in Tokyo, the Euro was trading against the greenback at $1.3970, down slightly from the $1.4000 it struck during New York trading late yesterday. Versus the Japanese Yen, the Euro was trading at 112.94 Yen, down from 114.22 Yen in New York.
Most analysts expect risk appetite to be generally subdued unless and until the impending nuclear disaster in Japan is satisfactorily resolved. Equity markets are struggling to regain earlier losses, but the recent injection by the Bank of Japan has offered investors some reassurance, pushing the Japanese Nikkei into positive territory by 3.4%.