FXstreet.com (Barcelona) - A slew of bad economic news has sent the euro tumbling more than 130 pips versus the dollar so far in today's trading to set a new low under 1.4255 not seen since December 23.
The drag-down effect caused by the serious concerns regarding Greece's enormous budget deficit and scandal over the Euro-Zone member's tampering with its fiscal data has been multiplied during today's trading by the pessimistic downturn in German economic sentiment and better-than-expected TIC flows figures from the US.
The euro is likely to suffer for quite some time, according to experts.
A larger than expected drop in Germany's investor confidence is adding to the ongoing negative sentiment surrounding the Greek budget situation, said the Wells Fargo Research Team. As we expect the European budget troubles to remain a frequent theme in the months ahead, we would remain sellers of any bounces in the euro.
Andrew Wilkinson, analyst for Interactive Brokers LLC, argues that the euro's woes will not be cured until a solution is found to the Greek budgetary debacle.
The stresses and strains of the Eurozone are very much for real at the moment, and if you ask your local finance minister he'll probably point his finger at Athens, Wilkinson said. EU commissioner for economic and monetary affairs, Joaquin Almunia said that while the plan drawn up by the government of Greece was adequate, it was comprised of what her called ambitious spending cuts.