Greece Debt Still On The Mind Of Investors

Posted April 27, 2010

In currency trading on Monday, Greek debt continued to plague the euro. The cost of debt soared for the second time.



Most investors believe that this week will be an uneasy one for the euro and that proved to be the case on Monday as the euro fell on the day. Investors had hoped that the with the Greek bailout in place last week that the euro would find more stability going forward. However, the euro fell anyway especially as the cost of protecting Greek debt problems increased.

The largest problem holding against the euro in trading was the fear that the negotiations between the European Union and the International Monetary Fund would lead to more turmoil. Further, there is concern that Greece will have problems implementing any austerity measures. Other concerns about other euro zone nations also struggling continue to play on the minds of currency investors.

Merkel Comments

The euro moved back towards US $1.3320 during trading. This drop happened right after headlines from German Chancellor Angella Merkel ran after a news conference in the early hours of trading. Merkel said that a solid deal was needed for the Greek debt crisis to be averted and that if the aid was needed, and absolutely necessary, the country would get it. Germany is to give 8.4 billion euro to the 30 billion euro bailout for the country, though there is still work to be done to convince investors to do so.

By the Numbers

In trading on Monday, the euro moved from US $1.3372 as of late Friday trading to US $1.3327 by the end of the day. The US dollar moved from Y 94.06 to Y94.25 on the day while the euro moved from Y 125.78 to Y125.72.  The dollar moved from CHF 1.0735 to CHF 1.0755. The UK pound also moved from US $1.5369 to US $1.5470.

The ICE Dollar Index moved from 81.413 to 81.495 during trading. This is a weight of the US dollar against other trade weighted currencies.

The US dollar moved from C $1.000 as of late Friday to C $0.9979 in trading on Monday.

US Recovery

Tuesday and Wednesday marks the meeting of the Federal Reserve in the United States. Investors hope that reports will indicate that the US economy is stronger than what it has looked like in recent weeks. If there is a better outlook on the economy, investors will look for expectations of an increase in the key interest rates that stand at record lows currently. Most believe that the Federal Reserve is unlikely to move these rates until at least next week's meeting.


The Canadian dollar moved higher against its US counterpart during trading on Monday, even though oil prices were lower. This was due to Canada's strong fiscal position currently. The Bank of Canada said they would keep low interest rates until the end of the second quarter last week.

Note that there was no movement in the Australian dollar nor the New Zealand dollar for the day as the markets were closed due to a holiday.