The Yen advanced against all of its counterparts as Forex market traders speculated that the hike in oil prices, along with the debt crisis in the Euro zone, could dampen global economic growth. The Euro rate fell the most in close to three months against the Japanese currency and declined versus the U.S. Dollar after the Standard & Poor’s placed the Euro-zone’s rescue fund on a negative outlook. The EFSF was downgraded in January after Austria and France, two nations that serve as guarantors of the fund, also had their credit ratings lowered.
The 17-nation currency remained under pressure despite the fact that Germany’s lower house of parliament approved the second Greek bailout package. Currently regional leaders are faced with having to decide whether they’ll bolster the bailout firewall, as they prepare for another important meeting set to take place in Brussels on March 1st and 2nd.
Crude oil rose to $109.95 per barrel, which marks the highest price since May and then declined to $108.83 yesterday. According to some economists, this may put a crimp on American consumer spending and may in turn prompt the Federal Reserve to implement easing measures to fuel economic growth. Other reports indicated that the U.S. economy is recovering, especially as data confirmed that the number of people buying homes increased 2 percent in January.
The G-20 meeting concluded with participants agreeing that an analysis of the “financial firewall” is needed prior to boosting the IMF’s resources.