Market info

Dollar slips against the euro

08 Feb  - Fundamental 

The dollar weakened against the euro Monday, but held firm against other major currencies, as concerns about Greece's fiscal health eased slightly.

What prices are doing: The dollar was down 0.2% versus the euro to $1.3701. It was unchanged against the U.K. pound at $1.5645. Against the Japanese yen, the dollar was flat at ¥89.29.

What's moving the market: The euro regained some ground as borrowing costs in Greece retreated from record levels.

The shared currency had been under pressure in recent weeks as the growing fiscal problems in Greece, Spain and Portugal raised fears that Europe's tepid economic recovery could fall flat.

But analysts said prices for certain Greek government bonds were stabilizing, suggesting that some of the worries about that country's sovereign debt were abating. Bond prices for Spain and Portugal, however, remained high.

Meanwhile, traders said a weekend meeting of finance ministers from the Group of Seven major economies did not provide any significant direction for the currency market.

What analysts are saying: «With notions of sovereign risk still very present, it is somewhat reassuring to see continued stability in the Greek 10-year,» said Sacha Tihanyi, currency strategist at Scotia Capital.

«Sovereign risk has been a key market driver thus far in 2010,» he said. «But budget planning for fiscal year 2011 is not too far away and the currency market will likely exact a toll on those currencies whose governments do not exhibit fiscal restraint to a sufficient degree.»

© CNNMoney.com