Greece Aid Causes Turmoil in Euro vs USD trading

During Wednesday’s trading session, the euro seem to have hit its one year low trading mark, and this came about since investors were not to happy about what was happening on the Greece debt crisis, and fretted that it could spread after the credit ratings of Portugal as well as Greece was downgraded.

The euro fell to about $1.3143 which was the lowest since April 2009, this was according to Reuters. The dollar on the other hand seemed to be having a field day and was at a 11 month high against a few currencies against Greece’s debt problems could result in some kind of risk aversion and this would only get the Euro stocks even lower.

The euro however did not do well and was surprised by the Greek government’s bond yields and this could even get their spreads over the existing German benchmarks to a new record, and this would come about the day when the ratings agency Standard & Poor’s cut Greek debts to a new low level and even downgraded Portugal in return.

According to a few analysts the downgrade in Portugal would result in wider credit risks in the euro zone, and this could create some more cracks in the euro system and then even continue battle against the single currency.

According to the currency strategist at Societe Generale, Phyllis Papadavid who said, “The euro is going to remain under pressure given a lack of clarity on the euro zone outlook – whether there will be more contagion to other euro zone economies, and what concrete structural reforms are going to take place in Greece.”