Debt Crisis Eats Away Euro’s Strength

The euro slumped today, erasing this week’s gains against the US dollar, on concerns that the European Union leaders won’t be able to reach agreement about measures necessary to battle the debt crisis.

German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet on June 17 in Berlin as the pressure to resolve their disagreement strengthens. Standard & Poor’s lowered its long-term sovereign credit ratings on Greece to ‘CCC’ from ‘B’ on June 13 and issued the negative outlook on the long-term ratings. The rating agency said “the downgrade reflects our view that there is a significantly higher likelihood of one or more defaults”.

EUR/USD tumbled to 1.4303 from 1.4438 today as of 11:04 GMT. EUR/JPY slipped to 115.45 from 116.22.

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