Central Banks Across the World Pressured to Fight Against Euro Depreciation

Greece’s debt turmoil has found a favorite conduit for spreading contagion: the $5.3 trillion-a-day foreign-exchange market.

From Sweden to Switzerland, central banks are battling to contain an appreciation of their currencies versus the euro. Greek risks are also infiltrating markets in Eastern Europe after Greece’s decisive vote against austerity this week. Even the Bank of England, whose economy is showing signs of a gradual recovery, may find itself compelled to delay tightening monetary policy, while Japan has signaled it may boost stimulus if the yen strengthens.