This week, the euro had its biggest weekly loss against the dollar this year as the currency was rapidly losing attractiveness amid the escalating sovereign-debt crisis. Forex market participants were running away from the currency, making it touch the lowest level since 2010 versus the greenback.
Greece remains on the forefront of talks among investors as the elections in June may determine whether the country remain in the eurozone. The chance of the Hellenic Republic leaving the currency union is considered to be high as anti-austerity political parties are in favor of voters. Greece is in no way a single country having problems. Spain is another country in the news headlines that is giving traders creeps. The country’s sovereign credit rating was cut by Standard & Poor’s and Spanish banks were downgraded by rating agencies. The European Union summit has not helped the matters and in fact even worsened investors’ sentiment as it showed that European countries are divided in their opinions regarding the best way out of the crisis. Talks about disintegration of the eurozone and the euro are abound. They are, obviously, not beneficial for the common European currency.
The performance of the euro was almost similar against all currencies. The shared 17-nation currency rose on Monday, but later it entered a free fall. The euro has fallen for the fourth consecutive week against the dollar and for the fifth week versus the yen.
EUR/USD slumped from 1.2763 to 1.2515, posting the biggest weekly loss since December, touching 1.2496 — the lowest price since July 2010. EUR/JPY dropped from 100.97 to 99.72, while the weekly low was at 99.35 — the lowest since February 1. EUR/GBP tumbled from 0.8076 to 0.7990 — the lowest weekly close since October 2008.
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