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.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
