In FX news, the Euro plummeted from a two-month high versus the U.S. Dollar after E.U. Finance Ministers announced their decision to withhold aid from Greece, thereby increasing the likelihood of the country’s economic collapse. The 17-nation currency dipped from the highest price since December against the Yen as a Greek political leader voiced his opposition to the proposed austerity measures. Prime Minister Lucas Papademos told his cabinet that they must all agree on the required measures in order to obtain the bailout funds. However, five ministers resigned in protest.
Meanwhile, the U.S. Dollar advanced against the majority of its currency exchange peers after equities declined on speculation that plans to help Greece avoid a default were falling apart. Data releases showed that Consumer Confidence declined on concerns that wages will remain stagnant. Other reports from the Commerce Department indicated that the U.S. trade deficit hit a six-month high given the hike in imports prompted by economic recovery.
The Canadian Dollar slipped the most in one month against the greenback after European officials insisted that Greece should implement more stringent austerity measures before it receives another aid package. The Loonie dipped below parity with its American counterpart despite stellar print revealing that the country sustained a trade surplus of C$2.7 billion in December.
Lastly, the Australian Dollar fell for the first time since December as the Reserve Bank reduced its growth and inflation forecast for 2012.