| CATEGORY: FX |
Wed 25 Jul 2012
|
LONDON (SHARECAST) - The euro fell to a two-year low against the dollar on Tuesday as investors winced at weaker than expected German manufacturing data, just a day after Moody's downgrade.
The euro fell to a low of $1.2040 after EU officials warned that Greece is unlikely to be able to pay off its debt and that more debt restructuring would likely be needed.
Manufacturing figures from Germany rattled market nerves, after the Eurozone's biggest economy said it contracted at its fastest rate in over three years. Data also showed that its service sector contracted while in France, factory activity declined at its fastest rate in three years.
The data follows Moody’s decision to lower the outlook on Germany’s triple-A rating to negative from stable, as it cited growing concern about the Eurozone debt crisis. The Netherlands and Luxembourg were also moved to negative.
Safe haven demand sent the dollar index, which measures the US currency against a basket of six major currencies, past 84 for the first time since 2010. It advanced to 84.009 from 83.641 on Monday.
Against the Japanese yen, the dollar bought ¥78.19 compared to ¥78.38 the previous session. The euro fell 0.7% to ¥94.31 yen after falling to an 11-1/2-year low.
Sterling traded at $1.5510 from $1.5523 on Monday and rose 0.4% to 77.85p against the euro. However trading was more subdued than usual ahead of Wednesday's second quarter UK economic output data.
CJ
|
|
|
|
 |
|
