Wednesday, 28 Apr 2010

Euro Zone hit by Greek Debts, Spain Rate Downgraded to AA

Greek debts concerns continued to occupy investors during today's session. In respond to the crisis triggered by the rating downgrade yesterday, European Union leaders sent positive signals to investors by reassuring aid package to Greece. Markets remained calm for most of the day, after EUR/USD hit one-year low during yesterday's trading session. However, during New York trading hours, the S&P group submitted another rate downgrade, this time for Spain.

EUR/USD is currently trading at 1.3158 in respond to Spain's rate downgrade, after trading around 1.3200 during most of the trading session. Searching for alternative investment, traders seemed buying Gold. The gold trend is behaving in different to other commodities, currently trading at 1171.00, Gold is trading at its highest level since December. Investor's flee from unstable currencies into assets which are safe from default.

Less than an hour before the FOMC statement, markets seem calm, as investors are waiting to U.S. FOMC statement, and the federal rate decision. Investors would like to hear positive signs about the U.S. recovery, in such case, they might put aside sovereign debts concerns and the EUR together with other riskier assets might partly recover recent losses.