The European Central Bank hints at a potential rate hike, but the euro currency, along with related exchange traded funds, remain depressed as the markets zero in on Greece and the debt crisis.

    The euro experienced its first weekly depreciation in four weeks against the U.S. dollar as the European Central Bank hinted at rate increases, report Monami Yui and Masaki Kondo for Bloomberg. The euro weakened against 10 of 16 major currencies on concerns that the Eurozone will deliberate longer on solving the Greek financial-debt problem.

    “I see a bigger chance for the euro to decline,” opined Yuji Kameoka, chief currency strategist in Tokyo at Daiwa Securities Capital Markets Co. “People expect the ECB to be on hold after raising rates in July.”

    Analysts are a letter from German Finance Minister Wolfgang Schäuble which states that private contributors need to make “quantified and substantial” contributions, writes Bradley Davis for The Wall Street Journal.

    Marc Chandler, global head of foreign exchange at Brown Brothers Harriman in New York, remarked that Schäuble’s statement may have created greater volatility in the market and that traders may begin to test the currency at the key supporting price of around $1.4480. Most economists believe the events in Europe are moving market sentiments, singling out the potential for Greece’s debt problems to spread to other Eurozone members.

    “We conclude that the direct impact of a Greek restructuring should not be sufficiently large to drive the euro in the medium term,” stated Jens Nordvig, head of G10 foreign exchange strategy at Nomura Securities in New York. “The key unknown is contagion, and in this context the resilience of bigger countries remains key.” [Dollar, Euro ETFs Back for Test of 50-Day Average]

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