Euro Slides Closer To Parity With Swiss Franc
The euro continued its downward spiral against the Swiss franc on Tuesday, as frightened investors flocked to safer assets amid mounting concerns about the health of the global economy.
Focus has turned to the Federal Reserve for the reaction of U.S. policy makers to the bloodletting on Wall Street over the past few sessions.
Economists predict that U.S. interest rates will be held at effectively zero, but the markets will be listening intently for clues about a potential third round of quantitative easing.
Meanwhile in Europe, markets remain rattled by an escalating debt crisis that threatens to eventually cost Germany and France its AAA ratings.
While the European powerhouses are fiscally sound, exposure to the debt of Italy and Spain are making them a riskier bet.
S&P downgraded U.S. debt last Friday, sparking a global sell-off of stocks and resource commodities.
The euro was steady near $1.4250 versus the dollar ahead of the Fed's interest rate decision at around 2 pm ET. The pair has wobbled near that level for the past few months.
The euro dropped to a new record low of CHF 1.0530 against the Swiss franc, and appears bound for parity unless Italy and Spain make meaningful structural reforms.
Choppy dealing left the euro little changed near GBP 0.8740 versus the sterling. U.K. house prices increased in July amid record low interest rates.
Germany's exports declined more than expected in June, data from the Federal Statistical Office showed Tuesday.
Exports fell by 1.2 percent month-on-month in June, following May's 4.4 percent rise. The expected rate of decline for June was 1 percent.
Inflation in China continued its relentless rise in July, climbing to its highest level in three years on the back of spiraling food costs, latest release from the National Bureau of Statistics showed Tuesday. The rate of inflation rose to 6.5 percent in July from 6.4 percent in June.