Futures Market News
As EU leaders meet, euro hits 21-month low
May 23, 2012 10:56 AM
With EU leaders preparing for a summit later Wednesday to help address the growing concerns about the region's economy, the euro fell to its lowest point against the dollar in nearly two years, according to Reuters.
The euro marked a 21-month low early on Wednesday, falling to $1.2615 against the dollar. The drop represents a clear indication that investors doubt EU leaders can put together a plan to comprehensively address the growing problems in Greece and elsewhere in the euro zone.
Speculation has intensified that Greece will ultimately be forced to drop the euro, with potentially catastrophic effects for the country, and a similarly chilling potential for the euro.
"The euro's downtrend is entrenched and we think there are too many risks of potentially nasty outcomes in the euro zone, especially with regard to what will happen to Greece," Ned Rumpeltin, currency strategist at Standard Chartered, told Reuters. "If there is a bounce, we will see the euro consolidating a bit more, but if we end near today's lows, then we should see it weaken further."
The New York Times reports many Greek businesses have already seen the potential slowdown that could be caused by reverting to the drachma, leading most in the country to push to retain the euro.
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