Euro Falls Against Dollar

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Euro Falls Against Dollar

Friday, 19 February 2010 08:16

London - Euro falls against dollar on Thursday local time, since the European single currency difficulties to drive the debt concerns that Greek drama will spread to countries other euro zone.
The European single currency fell to 1.3585 dollars on Thursday night from 1.3598 dollars in New York at the end of Wednesday.

Dollar also rose against the Japanese currency to 91.39 yen from 91.23 yen on Wednesday.

"More and more evidence of relatively slow economic recovery in the euro zone showed any increase in the euro will be limited," the analyst forecast Credit Agricole, Mitul Kotecha.

Last week, the euro sank to a nine-month low 1.3532 dollars, hit by fears that the country-other euro zone countries including Portugal, Ireland, Italy, and Spain could suffer the same fiscal problems as Greece.

Since it has rebounded slightly since the possibility of a "worst case scenario" from the Greek failure to pay debts or pull out of the euro area seems to have diminished, Kotecha said.

But a report in the Wall Street Journal that the derivative contracts taken out by municipalities in Italy could threaten the local public finances for decades, reviving jitters that the Greek fiscal problems could spread throughout Europe.

"Speculation grew that Greece is not the only country in the European fiscal difficulties," Hiroshi Maeba, senior trader at Nomura Securities, said. "I expect the euro to decline trend can continue."

European Union finance ministers have called on Athens to prepare for drastic action on March 16 to control the public deficit that stood out - the highest in the 16-member euro zone. Cutting costs and radical new measures set to be raising taxes imposed under the new agreement the voting rules of the European Union.

The resurrection of dollars also came from a market perception that the Federal Reserve to move closer to the tightening of credit. The central bank has maintained a major interest in the federal funds between zero and 0.25 percent for more than a year in an effort to support the recovery from recession.

According to the minutes of policy meetings of the Federal Open Market Committee (FOMC) last month released on Wednesday, the central bank to discuss the prospects pelepasab extraordinary stimulus measures.

"Treatise also shows that policy makers have raised their economic forecasts for this year at the lower end, signaling more optimistic about the prospects for the future of the U.S. economy, which in turn support the dollar sentiment," said Michael Hewson of CMC Markets.

In London on Thursday, the euro changed hands at 1.3598 dollars against 1.3585 dollars on Wednesday, at 124.14 yen (124.06), 0.8705 pounds (0.8676) and 1.4664 Swiss francs (1, 4666).

Dollar stood at 91.39 yen (91.23) and 1.0795 Swiss francs (1.0782). The pound was at 1.5604 dollars (1.5670).

On the London Bullion Market, gold prices fell to 1118 dollars per ounce from 1119 dollars per ounce on Wednesday. | antaranews.com | tenderoffer.biz |