The euro dropped against the dollar and the yen to the lowest rate since October and retreated versus the pound today as there are no sings that the crisis in Europe may end.
The Italian borrowing costs surged to the highest level since 1997, reinforcing concerns about the debt crisis. Analysts say that the contagion now isn’t limited to only the peripheral economies.
The downgrades of Portugal’s and Hungary’s credit ratings weren’t helping to improve the sentiment. And now Standard & Poor’s lowered Belgium’s
In our opinion, protracted political uncertainty remains a risk to its creditworthiness, in particular given i) the likely slowdown in economic growth we anticipate for 2012, ii) increasingly difficult financial market conditions affecting most of the eurozone governments and iii) a high level of government debt and its rollover ratio and contingent liabilities related to the financial sector.
EUR/USD closed at 1.3224 after opening at 1.3345 and touching 1.3211 — the lowest level since October 4. EUR/JPY opened at 102.93 and reached 102.48, the lowest price since October 6, before closing at 102.88. EUR/GBP closed at 0.8573, down from the opening of 0.8611, while the intraday minimum was 0.8544.
If you have any questions, comments or opinions regarding the Euro,
feel free to post them using the commentary form below.