The euro toppled against the U.S. dollar and Japanese yen on speculation that Greece will be unable to repay its debt as the decision about the bailout was delayed, giving rise to the concern that the Greeceâs budget crisis will harm the borrowing ability of European indebted nations.
The concern for the ability of Greece to deal with its fiscal crisis increased after Germany delayed the decision about providing the aid for Greece, demanding the nation to cut its budget first. Standard & Poorâs lowered credit ratings on Greece and also lowered Portugalâs credit ratings because of âfiscal and economic structuralâ weakness, signaling that the budget crisis may be spreading to other European nations.
The euro is heading to the $1.32 level, the lowest level in about a year. The analysts say that if it’ll fall beyond this level, the future of the European currency would look really grim.
EUR/USD traded near 1.3233 18:20 GMT after opening at 1.3380 today. EUR/JPY fell to 123.27 from its opening level of 125.71.
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