Euro Struggles as Forex Traders Wonder Who’s After Greece

Even though there is something of a “risk on” attitude in the markets today, the euro isn’t benefitting. Indeed, euro is struggling today as concerns about an economic slowdown pile on top of worries about the sovereign debt crisis. Even though the Greek situation is resolved for now, some are wondering who might be next.

Indeed, the director of the International Center for Money and Banking Studies, Charles Wyplosz, is certain that Greece was just the first domino to fall. Greece recently qualified for a bailout from the ECB — but only after private bondholders took a significant haircut. The result was that Greece was seen as going into a selective default. Some even believe that the debt swap, and the bailout, won’t really fix Greece’s problems.
And, of course, there are others who think that more eurozone countries could follow Greece’s lead. Portugal could be on the verge of a similar crisis. Spain is showing signs of stress, and Italy and Ireland have been points of concern as well. But not everyone is so pessimistic. Jacob Kirkegaard, from the Peterson Institute for International Economics, thinks that the other countries will be able to hold on.
For now, though, Forex traders aren’t certain. That uncertainty is resulting in losses for the euro today, even though the general tone would normally favor the 17-nation currency.
At 15:02 GMT EUR/USD is down to 1.3095 from the open at 1.3147. EUR/GBP is lower at 0.8344, down from the open at 0.8409.

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