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Euro slides after Fitch downgrade to Ireland

Published 12/09/2010, 09:34 AM
Updated 12/09/2010, 09:36 AM

The European common currency dropped against majors after Fitch had cut its Ireland's credit rating to BBB+ on expected additional costs stemming from restructuring of sovereign debt and fragile banking sector.

Still, there are concerns that Ireland and other highly indebted nations in the region will struggle to trim their huge debt.

This week, the Irish Parliament voted on passing the 6 billion-euro budget with pressures ongoing to pass votes on the 85 billion-euro package granted from the EU and IMF last month, yet woes are not over.

On the other hand, the dollar showed some weakness against majors, falling back to the day's opening at 79.99 after touching a high of 80.29, as depicted by the dollar index which tracks the dollar movements versus a basket of major currencies.

The greenback did not benefit from the improvement in jobless claims data released today which gave some hopes the labor market is on the right track after the abysmal job report released last week showing that unemployment in November climbed to 9.8%.

Concerning the euro-dollar pair, it is currently trading near the day's opening at 1.3250 after recording a high of 1.3322 and a low of 1.3194, whereas the trading range for today is among the key support at 1.3120 and the key resistance at 1.3520.

Moving to the royal pair, it is showing slight incline where the pair is currently trading at 1.5802 after recording a high of 1.5840 and a low of 1.5726, while the trading range for today is among the key support at 1.5650 and the key resistance at 1.6075.

 Today, the BoE left both interest rate and APF quantity unchanged in December, yet the decision did not have much impact on the pound as it came in line with expectations.

With regard to the dollar-yen pair, it retreated to low of 83.64 where it is finding support at 83.70. The highest point was recorded at 84.11 where the pair is currently trading at 83.75.

The yen could not take advantage of the upbeat Japanese growth data which showed that annualized growth rose to 4.5% in the third quarter.

The trading range for today is among the key support at 82.80 and the key resistance at 85.95.

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