News that China is moving to reassess its Euro debt holdings sent the single currency spiraling down throughout the day yesterday. Growing fears in China regarding deficits in both Greece and Portugal caused the reevaluation. Consequently, the Euro tumbled to nearly a 4-year low against the U.S. Dollar. In addition, EUR/JPY fell from 111.36 yesterday, to 109.42 in late night trading. Currently, the pair has seen a slight upwards reversal and is trading around the 110.15 level.
Today, the Euro is likely to continue its downward trend as several U.S. economic indicators are likely to give a boost to the greenback. At the same time, a lack of any significant European news events will do nothing to boost confidence in the fledgling Euro economies. Furthermore, most investors are still extremely weary of investing in the Euro-zone right now, choosing instead to place their funds in safe-haven assets like the Dollar and Yen. With the U.S. economy currently in a boom period, traders may want to avoid buying into the Euro at the moment.