Euro skids toward fifth weekly fall but selling pressure slows
FXE•The euro was headed for a fifth straight weekly decline, down 0.3% this week to $1.1211 after reaching a 17-month low of $1.1161. Falling U.S. yields slowed the dollar’s rally as France’s debt market stabilised.
1. Euro losses ease
The euro was on track for a fifth consecutive weekly drop, but selling pressure showed signs of easing. It traded at $1.1211, down 0.3% for the week and more than 3% over five weeks against the dollar, after touching a 17-month low of $1.1161 on Monday.
2. French market concerns
Market worries over France’s record-high debt and the political difficulty of budget cuts had weighed on the currency. Marine Le Pen presented deficit-cutting plans this week, while protests over education conditions highlighted tensions between demands for social spending and market concerns. Macquarie strategists said an intensification of street riots could lead to higher bond-yield spreads.
3. Dollar and other currencies
The dollar’s gains slowed as U.S. yields headed for their biggest weekly drop in about three months. The yen was headed for a fourth straight weekly decline, while the New Zealand dollar was on track for a seventh consecutive weekly fall; New Zealand’s interest rate was 2.75%, compared with a U.S. federal funds rate range of 3.75% to 4%.
