• S & P Issues Further Warnings
  • S & P Issues Further Warnings

    David Sumner | 09:05 | 07/12/11
    The Euro weakened against the U.S. Dollar after the Standard & Poor’s issued a warning that it may downgrade the rating of 15 E.U. nations as well ...

The Euro weakened against the U.S. Dollar after the Standard & Poor’s issued a warning that it may downgrade the rating of 15 E.U. nations as well as that of the European Financial Stability Fund prior to this week’s summit. This, in turn, helped fuel demand for refuge currencies, causing the Yen to gain against the majority of its Forex peers. However, the Euro erased some of those losses as metrics revealed that German Factory Orders climbed the most in 19 months. According to some economists, a downgrade of the EFSF could have a more serious impact than the individual downgrade of any of the 15 countries.

The Franc weakened against all of its counterparts on data showing that consumer prices dropped during the month of November, suggesting that the central bank may lower the cap on the currency’s exchange value.

Meanwhile, the Canadian Dollar appreciated versus the greenback following an announcement from the Bank of Canada indicating that it would leave interest rates unchanged at 1 percent. The Loonie continued to rally as several key bank policy makers commented that growth in both Canada and the U.S. had been stronger than expected.

The Australian Dollar fell against its most traded money market peers after the Reserve Bank of Australia reduced the costs of borrowing money by 25 basis points for a second consecutive month. The New Zealand Dollar also dipped as the Standard & Poor’s placed the Euro-zone’s bailout fund on notice for a potential credit downgrade.

 

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