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Euro hammered as debt fears intensify

Written by Sam Coxhead on July 12th, 2011.      0 comments

9:00 AM (NZT)  The offshore market has seen a good old fashioned clean out with the EURO hammered lower as the debt crisis intensifies.
 
Greece stated they would miss deficit targets in 2011 and the Italian banking sector has been the target for investor angst , with Italian debt hitting levels not seen in 14 years and the countries’ banking stocks pummeled lower.
 
The European Central Bank has been canvassing private banks for advice on how to handle a Greek default, in what looks to be increasingly likely.
 
The safe haven assets of gold and the Swiss Franc are at record highs against the EURO. US debt has been aggressively bought as investors flee the stock markets and rush into fixed income.
 
The escalation of fear has seen flight to safety almost across the board with the standout performance coming from the Australasian currencies. The AUD and NZD have proven to be strangely sought after, giving up just a little ground to the USD,JPY and CHF. In a move such as this would normally have seen the “growth currencies” the first to be sold lower. The yield differential is one explanation, but in the face of softer commodity prices and a lower global growth outlook, the performance still seems a little strange.
 
At the very least, the rest of the week should prove interesting.
 
    Last 24 hours trade
  Current level Low High
NZD/USD 0.829 0.8275 0.8379
AUD/USD 1.0657 1.0632 1.0761
NZD/AUD 0.7780 0.7776 0.7802
AUD/NZD 1.2853 1.2817 1.2860
NZD/GBP 0.5213 0.5201 0.5234
NZD/EUR 0.5909 0.5855 0.5929
NZD/YEN 66.55 66.44 67.58
NZD/CAD 0.8030 0.8013 0.8078
 
 

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