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Business

Euro sinks below $1.20 threshold for first time since 2006

Text by News Wires

Latest update : 2010-06-04

For the first time since 2006, the value of the Euro has fallen to under $1.20. Some analysts have maintained that as long as the European currency remains over this key rate there was no threat of real crisis in the eurozone.

AFP - The European single currency tumbled under 1.20 dollars on Friday, a new four-year low on contagion fears over the eurozone debt crisis, dealers said.
  
At about 1535 GMT, the euro plunged as low as 1.1993 dollars, its lowest point since March 29, 2006.
  
"The euro has weakened significantly against the US dollar," said TorFX analyst Adam Solomon, adding that global stock markets also plunged "on concern that Europe's sovereign debt crisis will worsen."
  
CMC Markets analyst Michael Hewson said investors were ditching euros amid a flood of negative news.
  
"Europe seems to be the story that keeps on giving," Hewson said.
  
"Rumours of derivative losses at French bank Societe Generale, comments by the French prime minister that he is relaxed about the euro trading at parity against the US dollar, and the Hungarian Prime Minister's spokesman comparing Hungary's fiscal position to that of Greece, has sent investors bailing out of the euro.
  
"This negative sentiment was further reinforced by a disappointing US jobs number which came in way below market expectations."
  
The euro even fell despite a much weaker-than-expected jobs report in the United States, still seeking out its safe-haven status at a time of uncertainty.
  
"This number was a massive disappointment to the market ... and has resulted in further risk aversion across asset classes due to the high expectations," Hewson said.

 

Date created : 2010-06-04

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