Euro sinks close to 12-year low versus dollar

GMT 16:27 2015 Tuesday ,10 March

Arab Today, arab today Euro sinks close to 12-year low versus dollar

The euro
London - AFP

The euro tumbled Tuesday towards a 12-year dollar low, hit by eurozone stimulus, growing US rate hike speculation and Greek debt concerns, dealers said.
In London afternoon trading, the European single currency sank to $1.0723 -- the lowest level since mid-April 2003. The region's stock markets moved lower.
"The US dollar scored multi-year highs ... amid starkly diverging outlooks for interest rates globally," said analyst Daniel Sugarman at trading firm ETX Capital.
The shared eurozone unit continues to flounder one day after the European Central Bank launched its 1.1 trillion euro ($1.2 trillion) quantitative easing (QE) stimulus "bazooka".
The dollar neared an eight-year high against the yen as dealers bet on an interest rate hike from the Federal Reserve after bright US payrolls data.
The greenback surged in Asian trading hours to a high of 122.03 yen, a level not seen since July 2007. It later stood at 121.01 yen in London.
"Renewed upward momentum for the US dollar in the near term has been reinforced by the stronger than expected US employment report for February which has supported investor expectations that the Fed remains on course to begin raising rates from the middle of this year," said economist Derek Halpenny at Bank of Tokyo-Mitsubishi UFJ.
- Record-low bond yields -
Meanwhile, the yield on German, Italian and Spanish 10-year government bonds fell to new record lows on the ECB bond-buying programme to combat deflation and boost growth.
The rate of return to investors on 10-year German government bonds fell to 0.230 percent from 0.312 percent on Monday.
The yield on 10-year Italian government bonds fell to 1.219 percent from 1.280 percent and those of Spain to 1.231 percent from 1.275 percent.
Europe's main stock markets fell into the red, mirroring losses in Asia, as concerns lingered over Greek debt talks, while official data showed fresh weakness in economic powerhouse China.
London's benchmark FTSE 100 index of leading companies fell 1.42 percent to 6,776.92 points in afternoon trading.
Frankfurt's DAX 30 shed 1.16 percent compared with Monday's close to 11,448.20 points and the CAC 40 index in Paris lost 1.13 percent to 4,881.32.
"European equity markets are... moderately lower this morning (on) renewed concerns that Greece might be running out of money soon," said analyst Markus Huber at London-based broker Peregrine & Black.
"With negotiations between Greece and the Eurogroup finance ministers still not having yielded a result and time is running out fast, Greece appears once again destined to take centre stage."
- 'Athens dragging heels' -
Greece has agreed to start urgent technical talks on Wednesday on extending its crucial bailout after its eurozone partners accused debt-stricken Athens of wasting time in previous negotiations.
The main talks will be in Brussels but teams from Greece's creditors will also be on the ground in Athens, Eurogroup chief Jeroen Dijsselbloem said, despite the new left-wing government's earlier insistence that they should not return.
The announcement came after a meeting of eurozone finance ministers in Brussels on Monday, at which the Greek government outlined the reforms demanded by lenders in exchange for further cash.
"Athens is dragging its heels over reforms and patience is running low in Brussels," added IG analyst David Madden.
"The Greek government is pushing the envelope with its creditors and the market is scared by the prospect of another long drawn-out debt negotiation.
"The ECB’s government bond-buying scheme is being overshadowed by Greece, and if Athens keeps pushing its creditors around it may receive a rap on the knuckles."
- Strong dollar hits US stocks -
US stocks dropped early Tuesday amid worries about the strong dollar, reversing Monday's strong performance as the volatility of last week looked set to continue.
About 35 minutes into trade, the Dow Jones Industrial Average was down 1.04 percent to 17,808.14 points.
The broad-based S&P 500 fell 0.96 percent to 2,059.48, while the tech-rich Nasdaq Composite Index dropped 1.09 percent to 4,888.35.
Analysts cited concerns about the strong US dollar, expectations for higher US interest rates and uncertainty about the eurozone's debt negotiations with Greece for the market weakness.

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