Monday, May 30, 2011

Euro Weakens on Greek Debt Concerns

May 30, 2011

The euro weakened for the first time in three days versus the dollar, while oil and copper fell in New York on concern European governments will struggle to resolve the region’s debt crisis amid a slowing global recovery.

The euro declined against 13 of 16 major peers at 4 p.m. in New York. The yield gap between Portuguese and German 10-year bonds climbed to a record and Italian yields rose as the government sold debt. Crude oil lost 0.2 percent, copper futures broke a four-day winning streak and wheat sank 4.9 percent in Paris. The Stoxx Europe 600 Index lost 0.1 percent as EON AG and RWE AG (RWE) dropped after German Chancellor Angela Merkel’s coalition endorsed a plan to close all atomic-power plants by 2022.

Greek Prime Minister George Papandreou said he’ll press ahead with new austerity measures after failing to win backing from the main opposition parties as he races to keep bailout funds flowing and avoid default. U.S. employers probably hired fewer workers in May and factory orders in the world’s largest economy grew at the slowest pace in seven months, economists said before reports this week.

Greece “will be the focus this week, whether they can agree on the austerity conditions that are required,” Tim Condon, head of Asia research at ING Groep NV, said in a Bloomberg Television interview from Hong Kong. Doubts about the global economy will first “hit the peripheral European debt crisis countries,” he said.


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