EUR Stays Weak vs. the U.S Dollar
December 21st, 2009 Posted in Euro-Zone
Name: Rita Ruvinski
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The European single currency continued to weaken Monday on expectations the U.S. economy may recover more quickly than Europe. The single currency has been pressured by concerns about the fiscal health of some countries on the Euro-Zone periphery following recent rating agency downgrades on Greek debt.
The EUR was down 0.3% on the day at $1.4332, after falling to its lowest since September on Friday. Against the Japanese yen, the EUR was almost unchanged, exchanging hands at 129.88 compared to its of 129.57 Friday.
Meanwhile, demand for the European currency continued to weaken as the European Central Bank (ECB) said lenders may have to write down an additional 187 billion euros ($268 billion) as loans to property companies and eastern European nations threaten the financial recovery.
Analysts said that the Euro-Zone sentiment may further suffer from the fiscal troubles of its weakest members. This hurts the EUR as it makes it less likely the ECB will be in a position to raise interest rates any time soon. The EUR is likely to continue moving downwards, but probably won’t make such a major break this week. We continue to favor short positions on EUR/USD pair, with 1.4260-1.4175 as the next price targets.
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Tags: EUR/USD trading, Euro-Zone economy, European Central Bank (ECB)
