Tuesday, 30 Nov 2010

Euro-Zone Debt Concerns Continue to Weigh on the EUR

The EUR briefly reached a new low versus the USD today, falling to 1.2980, as concerns regarding Spain, Portugal and Italy dampened the euro sentiment. Italian, Spanish, Portuguese and Irish bond-yield spreads continued to widen relative to Germany, indicating investors the Greek and Irish debt crises will spread to further euro-zone nations.

The euro since rebounded, though it is still low on the day. The common currency is currently at $1.3034 from $1.3123 late Monday in New York. The single currency also dropped to 109.26 yen from 110.53 yen, after earlier reaching a low of 108.98 yen. The dollar fell to 83.80 yen from 84.25. The dollar again fell below parity with the Swiss franc after trading at 1.0003 francs yesterday. The pound declined to $1.5510 from $1.5574.

The dollar may see further gains today as the release of the Chicago PMI and the CB Consumer Confidence reports at 14:45 and 15:00 respectively are expected to show further improvement in the U.S economy. If the result of the Consumer Confidence result is as expected or higher we may see the EUR/USD pair back below $1.3000.