Monday, 3 May 2010

Euro Continues to Drop on Concerns that Greek Aid Package Won't Be Approved

The Euro dropped against all the major currencies during today's trading session. The EUR/USD pair dropped about 200 pips to the 1.3160 level. The Euro dropped against the Pound and the Yen as well.

It appears that for now, the rescue plan for Greece failed to achieve the primary target - to calm markets and to reduce uncertainty. Investors currently have two significant concerns in mind. The first concern refers to the credibility of the aid package. There are real woes that some of the region's governments will not support this move. In addition, the second concern refers to the message that the aid package sends out. When Spain, Portugal and Ireland might face the same struggle as Greece, will the Euro-Zone continue to lend such enormous amounts so easily? All this retains the high uncertainty that exists in the market and as a result weakens the Euro.

Looking ahead to tomorrow, traders are advised to remain updated on every aspect that involves the Greek bailout plan. In the near term, the Euro-Zone's problems will continue to have a large impact on the market, and every update is likely to shake the major currencies.