Euro Tumbles Together with Greece Budget

The euro fell against such currencies as the Japanese yen, the Canadian dollar and the U.K. pound today as the rescue plan for Greece, devised by the European Union week ago, so far has failed to decrease the borrowing costs for Greece, the country with the biggest debt in Europe.

The confidence in the ability of the E.U. to resolve the Greek crisis steadily falls, despite what officials say about the progress of the deficit-cutting plan and promises to lower the Greek budget deficit to 8.7 percent of the gross domestic product from 12.7 percent in the previous year. The concern arises that the rising borrowing costs will force the E.U. leaders to implement a rescue mechanism without proper preparations and planning, which will be funded by the taxpayers’ money.

Analysts suspect that the E.U. leaders were planning “to set up some sort of arrangement that never has to be used.” The European Central Bank President voiced hope that investors will gradually recognize and accept the steps taken by Greece.

EUR/JPY traded at 127.16 as of 19:37 GMT down from the opening price of 127.70. EUR/GBP traded near 0.8820 from the opening level of 0.8837. EUR/CAD traded at 1.3528.

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