Euro stung by Spain downgrade, yen looks to BOJ
By Ian Chua and Hideyuki Sano
SYDNEY/TOKYO | Thu Apr 26, 2012 10:54pm EDT
SYDNEY/TOKYO (Reuters) - The euro was bruised on Friday after Standard & Poor's hit Spain with a two-notch credit rating downgrade, while the yen could go either way depending on the scale of easing delivered by the Bank of Japan later.
The euro briefly skidded to $1.31766 from $1.3236 late in New York, before recovering much of those losses to stand at $1.3205, helped by buying against the yen.
The single currency stood at 107.02 yen, little changed from New York.
Standard & Poor's cut its credit rating on Spain to BBB-plus from A and gave it a negative outlook, warning it expects the government's budget deficit to deteriorate even more than previously thought due to economic contraction.
"This could boost Spanish bond yields again later today to above the six percent mark. The euro could fall further during the European session," said a trader at a Japanese bank.
S&P also affirmed its BBB-plus rating for Ireland but said its negative outlook meant there is a one-in-three chance it could cut the rating in 2012 or 2013.
With the euro under renewed pressure, the dollar index .DXY popped up to 79.106, from a 3-1/2 week low of 78.823 plumbed on Thursday.
The greenback though was little changed on the Japanese currency at 81.01 yen versus 80.95 in New York.
More: http://www.reuters.com/article/2012/04/27/us-markets-forex-idUSBRE83J15P20120427
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
| 