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October 28, 2021
BUSINESS

Euro drops against dollar and yen

The euro reached a 16-month low versus the dollar on Monday, because of the negative news from the euro zone over the weekend, with the risks of further declines seen in coming months, Mediafax informs.

The euro hit its lowest level since September 2010 of USD 1.2666 on trading platform EBS at one point.

Against the yen, the euro hit an 11-year low of 97.28 yen, its lowest level since December 2000. The single currency later trimmed some of its losses and last stood at USD 1.2710, down 0.1 percent from late U.S. trading on Friday and was changing hands at around 97.80 yen, down 0.1 percent.

The newsflow from Europe over the weekend was also far from inspiring. German magazine Der Spiegel reported on Saturday the International Monetary Fund (IMF) was losing confidence in Greece’s ability to clean up its public finances and work off its mountain of debt. In addition, an adviser to Germany’s finance minister Wolfgang Schaeuble told a Greek newspaper that a 50 percent write-down on Greek debt holdings, part of Greece’s debt swap deal, was not enough to put the country’s huge debt on a viable footing.

Some market players said stop-loss offers exacerbated the euro’s drop on Monday.

Underscoring the bearish view on the euro, currency speculators boosted short positions in the currency to record levels in the week ended Jan. 3, data from the Commodity Futures Trading Commission showed on Friday.

Focus this week will fall on Spain and Italy in the run-up to their first bond auctions of the year, with little sign that investors have started 2012 with improved appetite for the euro zone’s riskier assets.

U.S. jobs data last Friday highlighted the diverging growth outlook between the United States and Europe, suggesting further weakness in the euro/dollar pair.

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