Tags: euro

Euro Falls Ahead of Merkel, Sarkozy Meeting

Sunday, 08 Jan 2012 05:03 PM

The euro fell to an 11-year low against the yen and dropped to its least in nearly 16 months against the dollar before the German and French leaders meet amid signs the region’s sovereign debt crisis is hurting growth.

The 17-nation currency also slid before Spain and Italy sell bonds this week after yields rose. The dollar gained after data Friday showed the U.S. labor market is strengthening.

“We’re going to see more ongoing political noise and that’s really just a distraction from the bigger driver of the euro, which is the relatively weak growth outlook,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “As long as European growth underwhelms, the euro will continue to underperform the U.S. dollar, yen and probably also the rest of the major currencies.”

The euro fell 0.4 percent to 97.54 yen as of 8:28 a.m. Monday in Sydney after earlier touching 97.38, the least since December 2000. The currency declined 0.2 percent to $1.2687 and earlier reached $1.2671, its lowest level since September 2010. The dollar was at 76.89 yen from 76.97.

German Chancellor Angela Merkel and French President Nicolas Sarkozy meet in Berlin Monday to flesh out a new rulebook for fiscal discipline negotiated at a Dec. 9 summit that seeks to create a “fiscal compact” for the 17-member euro area. The talks will be followed by a joint press conference.

Futures traders increased their bets to a record high that the euro will decline against the dollar. The difference between wagers the shared currency would fall versus those that it would rise -- so-called net shorts -- surged to 138,909 in the week ended Jan. 3, according to the Commodity Futures Trading Commission.

Japan’s markets are closed Monday for a public holiday.

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2012-03-08
Sunday, 08 Jan 2012 05:03 PM
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