The Euro continues to be stuck close to a 2-year low against the U.S. Dollar as investors consider yesterday's German manufacturing data which suggests that not even the Eurozone's economic powerhouse can escape the debt crisis' tendrils. With the last trading day of the week still ahead, the Euro-Dollar has lost almost 2% on the week and could mark the largest 1-week decline since early April; for the month, the pair has lost more than 5%.
As reported at 12:04 p.m. (JST) in Tokyo, the EUR/USD pair was trading at $1.2525, only a few pips from the $1.2516 struck yesterday which was a low not seen since July 2010. The EUR/JPY pair was trading at 99.90 Yen, recovering from a recently struck 4-month low of 99.37 Yen. Analysts expect that the Euro-Dollar will likely consolidate around the $1.25 level.
As has been the case over many months now, worries over Greece's place in the Eurozone continue to incite market jitters. While previously there had been surreptitious talk of a possible Greek exit, the scenario appears to be on the verge of a real breakout as even E.U. Officials are warning the various sovereign states that they should prepare for just such an eventuality.
The U.S. Dollar meanwhile is the beneficiary of investors' fears; the U.S. Dollar Index has edged up to 82.398 .DXY, a level not seen since September 2010. The USD/JPY pair was also higher, trading at 79.74 Yen, a gain of 0.2%.