EUR/USD: Euro hits an 8-month low against US Dollar

ForexNewsNow – The euro continued to fall on Monday, reaching its lowest level since January against the greenback. Around 6:00 GMT, the European currency was trading around 1.3330 – compared with 1.3390, its rate on Friday at 21:00 GMT.

Just as investors were hoping and expecting to hear about new measures to stem the debt crisis in the euro zone, Greece acknowledged on Sunday that the country would miss its deficit targets for this year. Under pressure from the troika, Greece has also agreed to implement an additional €6.6 billion in new austerity measures in 2011 and 2012 to bring its budget back on track. This news revives once again the fears of Greece going bankrupt.

The Greek announcement comes at a bad time for the EUR/USD pair since the country is in the middle of discussions with its international creditors (Europe and International Monetary Fund) for the payment of the next tranche of 8 billion euros from the first bailout package.

Euro monetary union finance ministers are to meet on Monday at 15:00 GMT in Luxembourg in order to advance the implementation of the second Greece bailout plan, although no major announcement is expected.

For its part, the Franco-German couple is expected to meet “in the coming days in Germany” in order to “accelerate” the implementation of measures to help the euro area.