Tags: Dollar

European Debt Woes Drive Euro to 13-Month Low

Tuesday, 04 May 2010 11:38 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

The euro sank to a 13-month low Tuesday against the dollar as concerns about debt problems in Europe weighed on markets despite a massive bailout for Greece. The U.S. currency rose broadly as stocks and commodity prices tumbled.

In late morning trading in New York, the euro sank as low as $1.3023, its weakest point since April 2009. Late on Monday, it was worth $1.3212. Last November, before markets realized the extent of Greece's debt problems, it bought more than $1.51.

The euro has lost favor as European governments have scrambled to find a solution to prevent Greece from defaulting on its debts. A euro110 billion ($144 billion) aid package is now in the works. Germany, which will bear a lion's share of the load, is expected to approve it in parliament by the end of the week. The 15 other euro countries and the International Monetary Fund scrambled to bail out Greece as borrowing costs soared for indebted European countries.

But investors remain worried about Europe's ability to shoulder aid for other countries that may need help, such as Portugal. Borrowing costs for other indebted countries also remain high, said Brown Brothers Harriman currency analyst Win Thin.

"Markets are telling us that the aid package has not lessened default risk by any significant amount," Thin said.

Analysts don't see an end to the euro's fall. UBS AG, which had a three-month price target of $1.30, says its euro forecast is under review. Morgan Stanley, which has a euro forecast of $1.24 by the end of the year, is considering lowering its target.

"There's no easy way to fix the debt problem in Europe," said Morgan Stanley currency strategist Ron Leven. "It's very difficult to see how Greece can dig itself out of its debt problem." There may have to be a restructuring of Greece's debt beyond the bailout, he said. European banks, which are big holders of Greek bonds, would take a big hit.

In other trading, the British pound fell to $1.5122 from $1.5258 ahead of a general election Thursday that could result in a parliament without a majority party in charge. Analysts say that could make it difficult to improve the U.K.'s own budget problems.

The dollar rose to 1.0991 Swiss francs from 1.0846 francs and soared to 1.0232 Canadian dollars from 1.0103 Canadian dollars. The dollar rose against the New Zealand and Australian dollars, the Nordic currencies and most emerging-market currencies in Latin America and Asia.

Currencies of big commodity exporters such as Brazil, Australia and Canada were particularly hard-hit as the price of oil, metals and agricultural commodities slid.

The dollar edged lower to 94.47 Japanese yen from 94.59 yen late Monday.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

ESPN: NFL's Ravens Knew About Rice Video Within Hours

Friday, 19 Sep 2014 22:03 PM

The Baltimore Ravens knew about the video of star running back Ray Rice knocking out his then-girlfriend in an elevator  . . .

Blogger to Put Anti-Islam Posters on NYC Buses, Subway

Friday, 19 Sep 2014 22:22 PM

A New York blogger is putting up ads next week on 100 city buses and at two subway entrances featuring anti-Islamic mess . . .

Biden Praises Disgraced Packwood at DNC Women's Event

Friday, 19 Sep 2014 21:13 PM

In a speech on Friday celebrating women's leadership for the Democratic National Committee, Vice President Joe Biden pra . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved