Budget Woes in Europe Drive Euro Down for Fourth Straight Day, Reports Tortola Capital

Feb. 9, 2010 - PRLog -- Budget deficits in Greece and Portugal caused the euro to fall for the fourth straight day, as investors eying the currency shy away from buying the regions increasingly instable assets, say Tortola Capital analysts.

The 16-nation currency approached an 11-month low against the yen as concern about sovereign risk remained elevated even as Group-of-Seven finance ministers meeting on the weekend pledged to press ahead with economic stimulus measures.  “As sovereign risks spread in the euro-zone, risk aversion will continue in the market,” reports Henry J. Marshall, President and CEO of Tortola Capital, citing Susumu Kato, chief economist in Tokyo at Credit Agricole Securities, a unit of France’s Credit Agricole SA. “Implications of the financial issues remain unclear, which has weighed heavily on the euro.”

European finance ministers reported over the weekend that they will strive to ensure Greece tackles its deficit. Governments face a growing dilemma as they seek to strengthen the recovery from last year’s recession at a time when rising sovereign debt burdens are being punished by investors and threaten to constrain future growth.