Stock markets sink

Euro hits seven-week dollar low

GMT 13:39 2011 Friday ,25 November

Arab Today, arab today Euro hits seven-week dollar low

The euro plunged to $1.3226, touching the lowest point
London - AFP

The euro plunged to $1.3226, touching the lowest point The euro tumbled to a seven-week dollar low on Friday and stock markets sank as investor confidence evaporated over a possible solution to the eurozone debt crisis, dealers said .
The European single currency plunged to $1.3226, the lowest point since October 4. It later stood at $1.3270, down from $1.3347 in New York late Thursday.
"As confidence that a solution to this crisis might be forthcoming and that the euro will survive has evaporated, (it is) no surprise that international investors have chosen to ditch the euro in favour of more safe-haven currencies," said Howard Wheeldon, strategist at brokers BGC Capital.
"The reality is that as those charged with leading the eurozone out of this crisis appear to have moved further apart, it seems to me that short of a miracle the euro will just keep heading south."
In midday trade, London's FTSE 100 index slid 0.39 percent to 5,107.68 points, Frankfurt's DAX 30 lost 0.35 percent to 5,411.35 points and in Paris the CAC 40 shed 0.47 percent to 2,809.12.
The Milan stock market plunged 1.91 percent after Italy paid record rates in a 10-billion euro ($13.2-billion) bond sale and as the EU kept up pressure over the country's debt on Friday.
The rate on bonds due in six months soared to 6.504 percent and the two-year rate hit 7.814 percent, levels considered dangerously high for the long term given Italy's massive 1.9 trillion euros public debt mountain.
 Traders remained nervous at the end of a week that saw investors shun a bond sale in Germany, the eurozone's paymaster and strongest economy, stoking fears the whole euro project is unravelling.
Asian equity markets meanwhile mostly closed lower on Friday as Thursday's meeting between the eurozone's three biggest economies -- France, Germany and Italy -- only highlighted their differences on finding a solution to the region's debt problems.
New York markets were closed for Thanksgiving on Thursday, when Germany and France promised to reform EU governing treaties even though Chancellor Angela Merkel stood by her refusal to back eurobonds or widen the ECB's role.
France had urged Berlin to allow the European Central Bank to become a lender of last resort, with the firepower to protect debt-ridden eurozone members from falling victim to the bond markets.
After the crisis talks, French President Nicolas Sarkozy, Merkel and Italy's new Prime Minister Mario Monti said they would move to reform EU governing treaties but insisted that all agreed that there would be no wider ECB role.
Sentiment was also hit after Moody's ratings agency slashed Hungary's sovereign rating to junk status, one day after rival Fitch had cut Portugal's credit standing to junk.
In addition, dealers speculated that China was scaling back its purchases of euros.
 "Large euro purchases by the Chinese have been supporting the troubled currency this year, although this may have been scaled back somewhat," said Spreadex trader Jordan Lambert.

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