Tuesday, 21 Dec 2010

Euro Falls Due to Possible Portugal Credit Downgrading

The euro paired most of its gains against the dollar today, after Portugal was put on warning for a possible credit downgrading. Investor fears that the euro-zone debt crisis would continue well into the new year were reinforced following the news. As a result, the EUR/USD pair fell more than 60 pips to 1.3133, before staging a slight correction. Currently, the pair ist rading around the 1.3155 level.

A lack of significant European news for the rest of the day likely means that the euro's current bearish trend will persist. Yesterday, the EUR/USD briefly dropped below the 1.3100 level. It appears thaat there is a real possibility that it may do so again today. Furthermore, traders can expect the euro to continue sliding against the other safe-haven currencies, inlcuding the Japanese yen and Swiss franc.