Euro Tumbles on France Debt Downgrade

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Euro Tumbles on France Debt Downgrade

Dollar

The greenback was much stronger not so long ago, but it has lost a bit of ground recently. The latest strength of the greenback is largely owed to the debt downgrade of France and the better-than-forecast housing data from the U.S. yesterday. The GBP/USD pair is higher this morning by 0.03% at $1.5913. The AUD/USD pair is up 0.02% at $1.0415. The USD/CHF has made gains of 0.08% to 0.9408 Swiss francs. The dollar still is quite strong and has not lost its appeal. The issue of Japanese stimulus and the threat of the European debt crisis may prevent the dollar making heavy losses, even when it is expected. Make sure to follow the U.S. housing data publication at 13:30 GMT.

 

Euro

The euro went very bearish since Moody’s Investors Service downgraded France’s government debt yesterday. This did not hurt stocks on Wall Street or the U.K. pound, but did drive the European single currency much lower. This was a big blow to the euro, as Eurozone ministers will be meeting today in order to discuss the Greek rescue plan. The EUR is quite a fragile currency, and when news such as France’s government debt downgrade occurs, then this is bound to rock the markets. The EUR/USD pair has dipped today by 0.09% to $1.2802. The EUR/GBP is weaker by 0.11% at 80.45 pence. The euro has also lost a lot of ground versus the Japanese yen in the latest round of trading. It looks like traders will be weary when trading the EUR during today’s session.

 

Yen

The yen has managed to uphold its value today, as the Nikkei rallies. The Bank of Japan has left its rates unchanged, which was expected. It was originally forecasted that the yen would weaken versus its peers. However, it has made some important inroads into both the dollar and the euro in the latest round of trading. Traders may be waiting to see what the next Japanese government will do in the near future before making radical decisions with regards to the yen. The fact of the matter is that there are other factors at play when it comes to the stronger yen at the moment. For example, its haven status is helping it follow the debt downgrade of France and the ongoing debt crisis which European policymakers have been unable to curb.

 

Crude Oil

Crude oil made some very important gains during yesterday’s trading session by rising nearly 3%. This comes after several weeks when the energy was under a lot of downward pressure. The bullishness we are seeing as of now is very much needed to show that crude is a resilient commodity. The gains came in spite of U.S. stockpiles rising by an estimated 1 million barrels during the previous week of trading. The weaker dollar helped drive up oil prices recently. The other factor at play was the positive housing figures which were published from the U.S. economy during yesterday’s trading session.