Thursday, 25 Nov 2010

Euro Continues To Decline As Fears of Debit Crisis Contagion Grow

The euro continues to fall against most of the major currencies during Thursday's early trading session. The euro dropped about 50 pips against the dollar and the EUR/USD pair reached as low as the 1.3285 level. The euro continues to trade at low levels against the Japanese yen, and the EUR/JPY pair is currently trading near a two-month low.

The euro fell today after clearing houses raised the extra margin requirements they charge for Irish bonus trading, following Ireland's bailout request from the European Union. In addition, fears of debt crisis contagion continue to dominate the market, as estimations are that Portugal and Spain might be in need of financial help. This also contributes to the low risk-appetite in the market, which keeps metal prices, such as gold and silver, at high levels.

Traders are advised to continue following the news updates regarding the Irish debt crisis and its possible impacts on other European economies, as this issue is likely to have a leading effect on the market for the near future.