Germany Backtracks on Greece, As Euro Declines

There’s more trouble today in Euro-land today. Hence the Euro is down again today. German officials appear to be backtracking on an EU-led rescue of Greece just hammered out by finance ministers three days ago. The US Dollar Index Future - Spot Price is up 0.85%, presently.

The European currency declined versus 14 of its 16 major peers as Greek Prime Minister George Papandreou challenged Germany to embrace a rescue package.
“This is another risk-off day at the moment,” said Dean Popplewell, an analyst in Toronto at the online currency-trading firm Oanda Corp. “The euro will stay under pressure until we get a clearer picture from European officials.”

Greek Prime Minister George Papandreou said he may turn to the International Monetary Fund to overcome Greece’s debt crisis unless EU leaders agree to set up a lending facility at a summit March 25-26. The IMF option had been dismissed by European Central Bank President Jean-Claude Trichet and French President Nicolas Sarkozy, who said it would show the EU can’t solve its own crises.

The euro is weakening as investors are questioning whether there really is a plan to support Greece,” said Simon Derrick, chief currency strategist at BNY Mellon Corp. in London. “From an investor’s perspective, do you feel comfortable, in these circumstances, being heavily invested in peripheral Europe?”

“Worries over further monetary tightening in China and political discord within Europe over a rescue package for Greece are sparking risk aversion,” said Lee Wai Tuck, a currency strategist at Forecast Pte in Singapore. “This is leading to buying of the yen and the dollar and selling of the euro.”