Reuters: US Dollar Report: FOREX-Euro slumps on mounting Spanish and Greece concerns

Reuters: US Dollar Report Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

FOREX-Euro slumps on mounting Spanish and Greece concerns Jul 23rd 2012, 16:15 Mon Jul 23, 2012 12:15pm EDT * Euro hits 2-year low vs dollar, near 12-year low vs yen * Fall broad-based; hits record low vs Aussie * Worries grow about stemming Spain and Greece fiscal problems NEW YORK, July 23 (Reuters) - The euro slipped to a two-year low against the dollar and a near 12-year trough against the yen on Monday on concerns Spain will have to seek a full sovereign bailout. Spanish bond yields soared to the highest levels since the euro was created despite euro zone finance ministers' approving on Friday terms for a loan of up to 100 billion euros to recapitalise Spain's banks. Analysts said this was the prime driver of the euro's fall. Tiny Murcia was on course to be the second Spanish region to request help from the central government, and media reported half a dozen local authorities were ready to follow in the footsteps of Valencia.. Spanish media believe six regions will now seek help after the announcement by the heavily indebted Valencia rattled markets on Friday, complicating Madrid's efforts to avoid a full-blown bailout.. Catalonia, Spain's biggest region by gross domestic product, also has the highest debt. It said this week it had not decided whether to tap the funding mechanism, though it is an increasingly likely candidate. "The week is off to a challenging start as rising fears over Europe push risk aversion higher," said Camilla Sutton, chief currency strategist at Scotia bank in Toronto. "Most of the focus is on Spain, with rising concern it too will need to access financial aid. "With no EU summit on the horizon and European vacation season upon us, capital is moving rapidly from the more exposed regions to the stronger sovereigns," Sutton said. The euro fell as low as $1.2067, its weakest since June 2010 and creeping ever closer to the 2010 low of $1.1875, using Thomson Reuters data. The euro was last at $1.2110, down 0.4 percent from Friday's close. After closing at $1.2156 in New York on Friday, it "gapped" lower to open at $1.2120 in Asia on Monday morning, signifying the market perceived the value of the euro had dropped over the weekend in response to events in the euro zone. Some $6.16 billion of euros have changed hands on Reuters Dealing through the Monday session. Against the yen the euro dropped to 94.22 yen, a level not seen since late 2000. The euro tumbled not just against safe havens like the dollar and the yen but also against currencies that usually fall in times of heightened risk aversion in financial markets. At the session lows of the day it hit a record low versus the Australian dollar, a more than 3-1/2 year low against sterling and a 9-1/2 year low versus the Norwegian crown. GREECE WORRIES The prognosis for Greece also appeared to darken, only adding to the reasons for investors to sell the euro. The International Monetary Fund, responding to a report in German magazine Der Spiegel that it might not take part in additional funding for Greece, issued a statement saying it was "supporting Greece in overcoming its economic difficulties." IMF officials are due to meet Greek authorities starting Tuesday to try get the country's economic program back on track. Speaking two days before a team of international lenders arrive in Athens to push for further spending cuts in return for more rescue payments, Prime Minister Antonis Samaras said Greece was in a "Great Depression" similar to that of the United States in the 1930s. Looking ahead, analysts said any weakness in euro zone provisional purchasing managers' surveys on manufacturing and services sector activity due on Tuesday would only add to the gloom and intensify selling pressure on the euro. With risk aversion back on the rise, the safe-haven U.S. dollar and yen found good support. The dollar also hit a 19-month high against the Swiss franc. The yen was the biggest gainer. The dollar fell to a seven-week low against the yen of 77.95 yen. The dollar was later little changed at 78.43 yen. Japan's vice finance minister for international affairs was reported as saying the country will not exclude any options when responding to excessive currency moves, although traders said the authorities were unlikely to consider intervening while the dollar held above 76 yen. The Australian currency fell sharply against the dollar and was last down 1.1 percent at $1.0260, with traders saying worries about slower Chinese growth only added to investor risk aversion. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions