After the waves of sell-offs that have spread from Europe to Asia since yesterday, also passing through Wall Street, the euro is also starting to suffer on the markets. The data on the weak US economy and worries about European banks certainly didn't help, which led investors away from the stock exchanges towards American T-bonds. Demand for safe-haven assets drove the yield on 1,97-year US Treasuries to an all-time low of XNUMX%, the lowest record ever recorded by the Fed and US Treasuries.
Dollar – After falling to 1,4259 dollars, the euro returned to positive territory against the dollar at 1,4395. But analysts say there is scope for further declines today given tensions over Greece. The dollar is strengthening as financial institutions are expected to need funds and therefore the demand for liquid money will grow. "If the demand for liquidity increases, very liquid currencies like the dollar will benefit," said analyst Kasper Kirkegaard, of Danske in Copenhagen. "As long as indicators point to a recession risk, the dollar will have solid footing," he added.
Swiss franc - With the Swiss franc the euro lost 1% to 1,1284 francs. The Swiss currency appreciated again, thanks to the growing demand for safe-haven assets (which also invested the ). However, his gains could be held back by new interventions by the authorities who want to curb the excessive appreciation of the Swiss currency. In recent weeks, the Swiss National Bank (SNB) has been issuing liquidity to the markets by increasing demand deposits and selling francs through swaps in the forward markets.
Yen – The euro also weakened against the yen – another safe haven asset appreciated in recent weeks – falling to 109,47/50 yen, down around 0,2%. Instead, the dollar is up very slightly to 76,36/39 yen but remains very close to the all-time low of 76,25. The Japanese authorities, fearing a trend similar to that of the Swiss franc, have declared that they will keep the performance of their currency under observation and could take measures to curb its appreciation.
Interbank rates – After the news of the 500 million dollars loaned by the European Central Bank (ECB) to a lender in the euro zone, investors have pricked up their ears and are watching more carefully funding in the interbank markets. Indeed, the latter saw sharp increases: the spread between the Libor and the Overnight Index Swap (OIS) reached 19 basis points, the highest level in the last 12 months. The three-month Libor also hit a four-month high at 0,29788%.
