Euro Weakens before ZEW Survey

The European single currency reached its lowest level against the dollar since the early December as the Forex traders expect that the ZEW Survey report will show that the Eurozone’s business confidence is at the very low levels today.
There are also expectations that the credit rating of several big European banks may get downgraded soon on the concerns that their Eastern European units will have to face the problems connected with the crisis consequences in those countries. The euro also continued its decline against the yen, falling for the second day against it, and went down against the British pound for the third straight day today.
The resignation of the Japan’s Finance Minister Shōichi Nakagawa that was announced today (and will happen after the budget bills are passed by the Japan’s legislative branch) increased the risk-aversion globally. All Asian stock markets, including the Japanese one, declined today, prompting investors to move out of the high-yielding assets in the favor of the dollar and the yen.
The majority of the currency analysts agree at the point that the growing financial turbulence in the Europe and especially in the Eastern Europe is hurting the euro and will keep many investors from buying the euro-denominated assets in the near future.
EUR/USD fell from 1.2795 to 1.2605 as of 7:30 GMT today — the lowest level since December 4. EUR/JPY declined from 117.27 to 116.50, while EUR/GBP went down from 0.8954 to 0.8912 today.

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