Euro-zone Worries
There have been increased worries about the Euro-zone, yet again. This has meant that the Euro has plummeted to an all-time low against the Swiss franc of 1.24 to 1.2345 which thereafter stabilized at 1.2360. This had an impact on Asian stocks which also “boosted safe haven investments like U.S. government debt and gold” yesterday. In addition, once the debt ratings in Greece was reduced by Fitch Ratings by three ratings at the end of last week, the Euro was plagued by increased selling pressure. Adding to this was the fact that Standard & Poor – Fitch Rating’s rival – also decreased its “outlook for Italy to ‘negative’ from ‘stable’.”
Asia Impacted by Euro Zone
Troubles in the Euro-zone have also been impacting Asia. Asian stocks have not been looking all that attractive due to the “weakening in U.S. stocks.” Asia’s bourses went “into the red, sparking a rush into safe-haven assets like government debt.” People are concerned about the ebb and flow of America’s stocks, together with the “global economic backdrop.” These factors combined are creating pressure and the situation is likely to remain the same for the next month or so. On the other hand, going for “safe-haven assets” did assist “U.S. Treasury notes build on Friday’s gains.”
Other Euro Worries
The euro has been encountering other worries too vis-à-vis the dollar, against which it slipped to $1.4095. Some traders even thought that the euro could plummet further than that in the near future. Experts believe this could be due to the fact that “investors have since swung from cheering the ECB's rate hikes to worrying about the impact of rising interest rates on peripheral countries.” It is just not a good enough reason to “buy the single currency” because of the possibility of a hike in ECB rates. Indeed, such increases might be viewed as “EUR-negative should peripheral concerns intensify.” So there is much work ahead for the euro. It is certainly far from being out of the woods yet. But there is also hope and as we see that this situation is pretty normal given the general ebb and flow of today’s less-than-stable financial world.
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