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Euro broadly lower as markets mull Greece ruling

Published 03/12/2012, 07:38 AM
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Investing.com - The euro was mixed to lower against its global counterparts on Monday, as market participants mulled Friday’s ruling that a credit event had been triggered by Greece’s debt swap with its private creditors.

During European late morning trade, the euro was lower against the U.S. dollar, with EUR/USD slipping 0.09% to hit 1.3111.

On Friday, the International Swaps and Derivatives Association ruled that Greece’s debt swap with private creditors constituted a “credit event”, which would activate credit-default swaps, designed to protect investors against losses on Greek sovereign debt.

Meanwhile, the greenback remained supported as Friday’s robust U.S. employment data dampened expectations for a fresh round of asset purchases by the Federal Reserve to help stimulate economic growth.

The Department of Labor said the U.S. economy added 227,000 jobs in February, beating expectations for a 210,000 gain. The unemployment rate held steady at a three year low of 8.3%.

The single currency was also lower against the yen, with EUR/JPY shedding 0.45% to hit 107.73.

Earlier in the day, Japanese officials reiterated concerns over the strength of the yen, despite a recent weakening in the currency.

Prime Minister Yoshihiko Noda said that the yen was still "strong," while Finance Minister Jun Azumi warned against any "excessively speculative movements."

The euro edged higher against the pound, with EUR/GBP easing up 0.14% to hit 0.8383. The single currency was almost unchanged against the Swiss franc, with EUR/CHF dipping 0.01% to hit 1.2056.

The shared currency was broadly stronger against the Australian, New Zealand and Canadian dollars, with EUR/AUD rising 0.47% to hit 1.2466, EUR/NZD adding 0.46% to hit 1.6046 and EUR/CAD inching down 0.01% to hit 1.2995.

The commodity linked dollars came under pressure earlier in the session after official data showed that China posted a trade deficit of USD31.48 billion in February, the largest trade deficit since 1989, after reporting a USD7.28 billion surplus the previous month.

Later in the day, euro zone finance ministers were to hold talks in Brussels, to give their final approval to a EUR130 billion bailout for Greece.

The ministers were also likely to discuss Spain, after Prime Minister Mariano Rajoy announced earlier this month that the country would cut its deficit to 5.8% of gross domestic product, instead of the planned 4.4% in 2012.

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