In Asian trading, the Euro wallowed near to a 4-month low versus the U.S. Dollar, but traders expect a continued downtrend following the stalemate in Greek politics which will usher in a new election, certainly, but moreover, the increasing risk of a Greek exit from the Eurozone. Bond markets in the Eurozone are already on nerve’s edge, and the latest news is sure to weigh heavily on upcoming sovereign debt auctions, even as yesterday’s Spanish and Italian yields edged perilously higher.
As reported at 12:08 p.m. (JST) in Tokyo, the EUR/USD was trading at $1.27223, a loss of 0.1% and only a few pips from the 4-month trough of $1.27215 struck yesterday on the EBS trading platform. Thus far in May, the Euro has lost nearly 4% of its value against the greenback. One analyst expressed surprise that losses keep e extending despite the pair being currently in oversold territory; he believes that it’s likely that $1.25 or $1.26 could be quickly seen.
The U.S. Dollar Index has gained favor as a safe haven, and the index was pushed to a 4-month high of 81.34 .DXY; the index is used as a measure of the greenback’s strength relative to a weighted basket of currencies which includes the Euro, among others.