• Fitch Downgrades Weigh On Euro
  • Fitch Downgrades Weigh On Euro

    David Sumner | 08:49 | 10/10/11
    Just as Forex exchange investors were digesting positive news out of the Euro-zone indicating there would be a coordinated effort to recapitalize the region’s banks, the Euro ...

Just as Forex exchange investors were digesting positive news out of the Euro-zone indicating there would be a coordinated effort to recapitalize the region’s banks, the Euro slumped against most of its peers. This took place after Fitch Ratings Agency downgraded the credit ratings of Italy and Spain. The news helped increase speculation that the Euro-region crisis is worsening and Greece is likely to default. The shared currency dipped versus the Yen following the announcement. The news also caused the Euro to erase prior gains it had obtained against the Dollar when the U.S. released better than anticipated Non-Farm Payroll metrics, thereby fueling demand for risk assets.

And as was expected, the Bank of Japan did not announce any further stimulus programs after its meeting on Friday. Officials issued a statement indicating that the country’s economy has continued to expand and is recovering after the earthquake. Earlier economic calendar releases including the Tankan Survey, signaled that growth is expected to exceed 4 percent and that Japan may be on a steady path to recovery.

Other world currency reports showed that Bank of England policy makers believe more can be done in regards to quantitative easing. Meanwhile, they raised the ceiling for purchasing assets to 275 billion pounds ($428 billion) from the prior proposed 200 billion pounds.

And finally, the Canadian Dollar reached its highest level in over a week against the greenback after government figures revealed that both Canadian and American payrolls had increased more than expected.

 

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