Euro hits 10 month low against the Dollar

The Euro has hit a 10-month low against the US dollar…. below $1.3300.

Markets are still jittery after Portugal’s debt was downgraded yesterday and with Euro leaders due to discuss a bail out for debt-stricken Greece.

The course of action is still undecided- Germany now wants the IMF to play a role (interestingly following Gordon Brown´s earlier line). The fact that Fitch Ratings downgraded Portugal’s sovereign debt yesterday did nothing to allay the fears over the stability of the currency. The bears are out!

The euro tanked below $1.33 on various trading platforms, its most southerly position since May 2009. It has recovered somewhat over the morning, as day traders cashed in their profits.

And the Chinese government is also stirring things up a bit, following a couple of days of Google bashing (after they decided to lift the censorship on Google.cn, or rather redirect it to Hong Kong along with those sandstorms from Beijing).
Chinese central bank deputy governor Zhu Min said the Greek debt crisis was just the start. ("Ouch"). But then, he does hold rather alot of dollars…..

The Euro was also down against the Swiss franc to the dismay of chocolate and watch makers. It hit a record low of 1.4230 francs yesterday.

EVERYONE LOVES UNCLE SAM.

Well not everyone, but the forex markets seem to be heading that way.The dollar index, which is a measure of the greenback’s performance against a basket of 6 other currencies, rose to 82.062, a 10-month peak.

Although the dollar lost traction by 0.2 % against the Japanese currency to 91.95 yen JPY, generally the direction is up.