Euro falls on Greece concern!
By: Lisa
The euro fell against the dollar on Wednesday, weighed down by uncertainty a day before a European Union summit about a possible bailout of debt-strapped Greece. The dollar gained after Bernanke, the U.S. Federal Reserve Chairman, said policy makers may raise the discount rate "before long," boosting expectations the U.S. central bank would start tightening monetary policy.
"There's a lot of vacillation on the part of policy makers, and there's a lot of uncertainty leading to the European ministers' meeting tomorrow about whether Germany would be able to help Greece or not," said Samarjit Shankar, managing director of global FX strategy at BNY Mellon in Boston.
"Over the next few weeks, we're looking for the downtrend in the euro to continue," Shankar said. He expects the euro to fall toward $1.35 by the end of the first quarter.
Euro area finance officials said bilateral aid by individual European Union members, chiefly Germany and France, or guarantees for Greek debt issues appeared the most likely solution, but they cautioned that no decision was imminent on the form of assistance.
In late trading, the Euro to $1.3728, after hitting a low of $1.3678.
Some analysts were unconvinced a bailout, if there were one, would solve all of Greece's problems. Concerns about the fiscal positions of similarly debt-impaired euro zone countries such as Portugal and Spain also made investors wary.
