The euro declined today against the Japanese yen as the traders sold the risky assets and moved to the «safe cash» after the Asian stock markets tumbled today; investors also expect that the inflation report in Eurozone will add more space for ECB to cut the interest rate.
Against the U.S. dollar the European currency showed a significant decline during the early trading session and reached the record low since December, but then corrected almost to the daily opening level. But the weekly opening gap still makes the euro to be lower versus the dollar compared the Fridays close level.
The only major currency that was literally squashed by the euro today is the British pound, which suffers from the worsening banking crisis in U.K. along with the galloping decline in all the sectors of the economy. It looks like the currency traders have already set their priority ranks among the major currencies — from the safest to the most dangerous: the yen, the dollar, the euro and only then the pound.
Analysts believe that tomorrows report on Eurozone December PPI will show a strong slowdown of the inflation in the region, which will indicate a jeopardy of the deflation. That would allow the European Central Bank to think about the lower interest rate, which in their turn will push the euro down to near 1.24 against the U.S. dollar.
EUR/USD rose from 1.2749 to 1.2755 as of 8:48 GMT today — still below the Fridays close rate of 1.2812. EUR/JPY fell from 114.31 to 113.58, while EUR/GBP soared up from 0.8832 to 0.8949 today.
If you have any questions, comments or opinions regarding the Euro,
feel free to post them using the commentary form below.
