Forex news - The euro slumped to near 8- month low versus the U.S. dollar on Monday as rising default risk of the Greek cause investor concern to the health of the banking sector of the euro zone grew. On Sunday the Greek government was forced to admit if his country might not be able to meet the target of cutting the budget deficit that has been assigned the ECB / IMF as a condition of granting bail the next stage.
The single currency also plummeted to their lowest level in a 1- decade versus the Japanese yen as European policy makers continue to struggle to find a solution to overcome the debt crisis that could potentially spread to the euro zone economy is larger and also the financial sector. These conditions of course will still put the euro under pressure, according to traders.
"The large uncertainty in the region will continue to lead Euro depressed. The fate of Greece increasingly unclear after their revised target of trimming the budget deficit, and the market still expects positive news from the finance ministers meeting in progress, " said Tom Levinson, forex analyst at ING. " The continued negative news the banking sector helped push the euro zone also avoid the risk of action in the market. "
Meeting of euro zone finance ministers on Monday and Tuesday are expected to urge Greece to implement the agreed structural reforms. Increasing the benefits of European Financial Stability Facility ( EFSF ) is also scheduled to be discussed at the meeting.
In the midst of a prolonged debt crisis, euro zone economic data released Monday also showed contraction in the manufacturing sector are growing in September as orders slump in the industry with the fastest pace since June 2009.
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