Maintaining the rate of the European Central Bank to 1%, combined with the fear of contagion to other Greek countries continued, to weigh on the global stock markets and the Euro vs Dollar exchange rate. The crisis goes global. Wall Street loses 9%.
The crisis in the euro area is now going global. This afternoon the New York Stock Exchange fell sharply amid concerns for the debts of several European countries. At some point the Dow Jones lost 8.68% and the Nasdaq 8.85%. Then they recovered most of the losses but now at 4:05 EDT Dow is down 3.21 percent. NASDAQ is down 3.44 percent suffering the worst loss in a year.
The euro vs dollar exchange rate has fallen to $1.26 for the first time since March 2009. It follows the insistence by the European Central Bank to keep the interest rates at 1 percent. It also increased the risk of a contagion of the Greek financial crisis within Euro area.
This created panic in Wall Street. Today’s demonstrations in Greece renewed the weakness and the fear about the stability of the economy. In the meanwhile the European Central Bank believes that it already made many concessions in accepting the program of giving 110 billion euros to Greece. It refused to finance government deficits by creating money, French Le Figaro reports today.
The dollar also ceded some ground against the Japanese yen.