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The euro held near a 17-month low against the US dollar this afternoon, on concerns that Standard & Poor's downgrade of eurozone states and the Greek debt stand-off would aggravate the region's debt crisis.
Weighing on the embattled currency this morning were credit rating downgrades of nine eurozone countries, including France and tiny Slovenia, and stalled talks between Greece and private creditors on a debt swap deal. The two events combined have pushed investors into the perceived safety of the US dollar as the risk of a messy Greek default rises.
Today, markets will likely scrutinise upcoming eurozone debt auctions for any sign of waning demand for peripheral eurozone debt, while concerns mount that the bloc's EFSF bailout fund may also lose its triple-A rating and France downgraded further (this time by Moody’s Investors Services). Trading in EUR/USD today will more than likely be dominated by events from the eurozone as US markets are closed for Martin Luther King Day.
