DEBT FINANCING. Euro slumps to low against yen 10 years as Greece worries Mount

Tokyo (Reuters)-the euro hit a low of six months against the dollar and a trough of 10 years against the yen, dropping below key technical levels and option barriers on concerns that is swinging the eurozone support for Greece and the country can be forced to default on its debt.
The Australian dollar, sometimes seen as a barometer of the risk appetite of market players, fell more than 1 per cent to a low of three weeks, below its 200-day moving average as investors worry that the global economy will be dealt a heavy blow to deepen the debt woes of the euro area.
"The Outlook for Greece are almost completely unknown. Support for the country seems to be stirring. The market is starting to find that the worst could happen, "said Katsunori Kitakura, chief croupier Chuo Mitsui Trust and banking.
"It is as if policy makers are starting to prepare for this," Kitakura said.
The common currency fell as low as $ 1.3550, its lowest since the end of February, before stabilising around $ 1.3587, still below 0.5% on the day he dropped below $ 1.3655, a pullback of 61.2% of their rally to $ 1.4940 in May $ 1.2860 in January.
The euro dropped to around 104.90 yen, after having broken below big triggers option in 105 yen, as already weak sentiment hit further negative news flow from Europe at the weekend.
Fears about a Greek default soared after high-level political centre-right coalition of German Chancellor Angela Merkel started talking openly about the subject.
This came on top of surprise departure of Juergen Stark on the European Central Bank last week that highlighted the great divergence between top politicians on how to deal with the problem of debt in the region.
Markets also are preparing for possible downgrade ratings of France's leading banks, as well as the sovereign rating of Italy. Moody's warned, on 17 June, that he can cut the credit ratings of Italy in the next 90 days.
"Friday at the latest, is likely Italy will have its Aa2 rating from Moody's lowered ... Moody's rating of Italy is currently two notches below AAA, compared with three notches with Fitch and four slots with S & P, this can be seen as catch-up, "Richard Kelly, head of European rates and research of FX TD Securities wrote in a note.
In the short term, the euro could be exaggerated, trading well below the lower Bollinger bands, now at $ 1.3711. Its relative strength index 14 days fell below the 30 mark, which is considered oversold territory, for the first time in more than nine months.
Still, the euro seems vulnerable, especially against the yen after having fallen below its 2010 low about 105.50 Yen to hit its lowest in more than 10 years.
SWISS FRANC
The euro held little changed against the Swiss franc in franco 1.2055 franco, above the floor the Swiss central bank 1.20 set last week.
With the Swiss franc is no longer Safe Harbor due to sale of Swiss National Bank and the yen also persecuted by the authorities of the danger of Japan intervention, the dollar became the best performance among the major currencies.
The dollar index rose as high as 77,521, its highest point in more than six months.
Against the yen, the dollar was at 77.49, keeping close to an all-around high 77.88 a month on Friday.
"For now, your best bet is a higher dollar against most currencies, but particularly against the euro and commodity currencies," said Joseph Capurso, strategist, Commonwealth Bank in Sydney.
In fact, commodities, currencies were under pressure on Monday with the Australian dollar falling more than 1% for a three-week low around $ 1.0363, having fallen below its 200-day moving average of $ 1.0383.
While the Aussie recover its incursion briefly below average last month, a large amount of long positions built up over many months thanks to its vantage point of income for risk to relax more.
According to data from the U.S. financial watchdog, speculators, the Chicago Exchange maintained a large net long position of the Australian dollar around one of 4.8 billion dollars.
Trading was choppy with volumes can be thinner than usual, as several centers in Asia, including China, are closed for a holiday.

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