Friday, 17 Dec 2010

Debt Worries Continue to Plauge Euro

As we close out the week, we see that the euro has tumbled against most of its main currency rivals, particularly the US dollar and Japanese yen. Analysts attributed the drop to the recent downgrading of Ireland's credit rating, which has highlighted the severity of the euro-zone debt crisis. Since this morning, the EUR/USD pair has fallen around 175 pips, while the EUR/JPY has dropped some 130 pips. Currently, the pairs are trading at 131.70 and 110.50, respectively.

Next week, the markets will likely be more muted than usual, due to the Christmas holiday. That being said, there are still a number of economic indicators throughout the week that may cause volatility. Traders will want to keep an eye on the main fundamental news out of the euro-zone to see if the 16-nation currency will be able to recoup this week's losses.