Tuesday, 21 Dec 2010

Euro's Fall Continues as Debt Woes Remain

The euro pared gains against most of its major currencies in thin trade on Tuesday after ratings firm Moody's put Portugal on review for a possible downgrade, reinforcing worries that the euro zone's debt crises would persist well into 2011. The EUR is currently trading lower against the USD by nearly 70 pips at 1.3077. The single currency also fell to a fresh lifetime low versus the Swiss franc as investor concerns over the euro zone periphery enhanced the safe haven status of the franc.

Moody's said it may downgrade Portugal's A1 rating by one or two notches after a review, citing concerns about the country's weak growth prospects and high borrowing costs, in the latest ratings-related jolt to a euro zone member.

As for tomorrow, many impacting economic indicators are expected from the U.S. and Europe economy. Traders are advised to pay special attention to two leading indicators, the U.S Existing Home Sales and Crude Oil Inventories. A positive result from both this indicators might boost the Dollar towards another day of rising trends.