Griekenland en China zorgen voor waardedaling van de Euro (en)
EUOBSERVER / BRUSSELS - Concerns over Greece and indications that China could take steps to cool its economy this year are weighing heavily on the value of the euro, with the common currency reaching a five-month low against the dollar in some markets on Thursday (21 January).
In Strasbourg the day before, European Commission president Jose Manuel Barroso told the European Parliament that Europe's economy is "at a delicate moment."
The euro has fallen steadily this week as investors keep a close eye on Greece's ongoing budgetary difficulties.
A change of government last autumn resulted in a dramatic upward revision of the country's deficit forecasts, prompting credit rating cuts and raising the possibility of a possible Greek default and spillover effects to other euro area economies.
"This Greece news is a huge piece of news," Gregory Salvaggio, vice president of capital markets at the currency- trading firm Tempus Consulting Inc. in Washington, told Bloomberg.
"If we see sovereign debt default, it could lead to a fracturing of the euro zone, and the euro's shine as a reserve currency is certainly going to diminish," he added.
Sentiment that Europe's economy will perform less strongly than the US this year also contributed to Thursday's slide in Asian markets, with the euro hitting $1.4067, the lowest point since 18 August last year.
"The euro is now being targeted ...as one of the assets likely to underperform in 2010 based on headwinds," Omer Esiner, senior market analyst at Travelex Global Business Payments in Washington, told Dow Jones.
Chinese data
Fresh data pointing to strong economic growth in China also contributed to the euro's slump, as speculation mounted that Beijing may take further steps to cool its economy. On Wednesday China's banking regulator said it would rein in new lending this year.
Figures showed China's gross domestic product expanded 8.7 percent in 2009, beating market expectations for 8.5 percent growth.
"The China data were strong, so people are now even more anxious over when the authorities might again try to apply the brakes on the economy," said Yasuo Nakayama, manager at Shinkin Central Bank.
With many economies around the world, including Europe, still struggling as a result of the financial crisis, speculation about Chinese tightening has raised worries about the potential impact on the world economy as a whole.