Euro heads for fourth weekly loss against dollar
Published 03/12/2010 | 10:11
The euro headed for a fourth weekly decline against the dollar, the longest run of weakness since May, amid concern European Central Bank President Jean-Claude Trichet hasn’t done enough to calm the region’s debt crisis.
The single currency fell versus the yen after Standard & Poor’s said it may cut Greece’s credit rating as proposed European Union rules threaten to hurt bondholders.
South Korea’s won rose, headed for a weekly gain, as overseas investors boosted their holdings of the nation’s shares for a third day.
The Dollar Index slipped before a report that may show US payrolls rose in November, according to a survey of economists.
“Trichet swatting everyone’s concerns away by saying they shouldn’t be concerned is no remedy in my book,” said Neil Mellor, a currency strategist in London at Bank of New York Mellon Corp, the world’s biggest custodian of financial assets.
“Fundamentally nothing has changed. None of the issues raised by the market have been addressed. The benefit of the doubt must still lie with a weaker euro.”
The euro traded at $1.3213 as of 8:25am in London, from $1.3209 in New York yesterday, and $1.3242 on November 26.
The 16- nation currency was at 110.51 yen, from 110.73 yen, down 0.8pc in the week. The yen strengthened to 83.67 per dollar, from 83.82.
The ECB kept its benchmark interest rate at a record low of 1pc yesterday and extended an emergency loan program to combat “acute” market tensions. The central bank will keep mopping up extra liquidity from its bond purchases, Trichet said at a press conference in Frankfurt.
Greece’s ‘BB+’ long-term sovereign rating was placed on “CreditWatch” with negative implications, S&P said in a statement yesterday from Madrid.
The rating company said it was assessing credit implications of the so-called European Stability Mechanism that may govern EU sovereign bonds beginning in July 2013.
The won strengthened for a third day as funds based abroad bought $373m more Korean shares than they sold yesterday, the biggest net purchases in almost three weeks, exchange data show.
US employment increased by 150,000 last month, after rising 151,000 in October, according to a Bloomberg survey before Labour Department report.
The Dollar Index, which IntercontinentalExchange Inc uses to track the greenback against the currencies of six US trading partners, slipped 0.2pc to 80.157.