By: Barbara Zigah
Unsurprisingly, given the Eurozone’s various crises over the past several months, the common currency is on track to record its worst quarter in better than a year. Records show that the Euro has thus far lost almost 7% against the U.S. Dollar in this 3rd quarter of 2011, and even today’s bounce will not stray that course. The most recent concerns have centered on the voting by several of the Eurozone member parliaments; yesterday, Finland’s Parliament, among others, approved the amendment to the bolstering of the EFSF vehicle. Today, Germany’s Parliament meets for a similar vote, seen by many as a test of confidence in Angela Merkel’s leadership.
The ongoing jitters over the debt spread to Spain and Italy has fueled more concerns about bank exposure to European debt. In the selloff of higher risk assets, the Euro is expected to continue the downtrend, and remains short of a key resistance level near $1.3715, while support is seen near $1.3475. Currently, as reported at 5:28 a.m. (GMT) the Euro was trading against the U.S. Dollar at $1.3617.
The U.S. Dollar Index, a measure of the greenback’s relative strength against major currencies, held close to 78.10 .DXY, not far from the 10-month high of 78.863 .DXY hit on Monday. Analysts believe that the U.S. Dollar’s strength as a safe haven currency could be undermined by speculation of Fed easing.