Monday, May 30, 2011

Euro Weakens Versus Dollar on Sovereign-Debt Concern; Kiwi Touches Record

May 30, 2011

The euro fell for the first time in three days against the dollar on concern the currency region will struggle to contain its sovereign-debt crisis.

The currency slid versus most of its major counterparts after Greece’s Prime Minister George Papandreou said last week in Athens that he will press ahead with additional austerity measures after failing to win backing from opposition parties. New Zealand’s dollar dropped after surging today to its highest level since exchange-rate controls ended in 1985 as the nation’s trade surplus widened to a record in April.

“Until we get resolution, some clarity on what’s going on, the market is not going to have the confidence to take the euro higher,” said David Watt, senior currency strategist at Royal Bank of Canada’s RBC Capital Markets unit in Toronto.

The euro depreciated 0.3 percent to $1.4274 at 3:24 p.m. in New York, from $1.4319 on May 27. The shared currency traded at 115.54 yen, compared with 115.67. The dollar was at 80.94 yen, compared with 80.80, after touching 80.70 on May 27, the lowest level since May 16. The pound fell 0.3 percent to $1.6468.

Markets are closed today in the U.S. for the Memorial Day holiday and in the U.K. for the Spring Bank Holiday.

The euro declined after Greece’s Antonis Samaras, leader of the biggest opposition party, New Democracy, rejected last week Papandreou’s plan for austerity measures, saying his party wouldn’t be blackmailed.


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