THE EURO fell by the most in more than two weeks against the dollar yesterday amid concern the region’s debt crisis will hamper efforts by governments and banks to raise funds this year.
The common currency weakened against all but two of its 16 major peers before France auctioned €8.5 billion ($11.3 billion) of debt yesterday.
The Swiss franc pared its gain against the euro after a gauge of manufacturing unexpectedly fell last month. The pound declined against the dollar and the euro. Taiwan’s dollar approached a 13-year high before a report this week that economists predict will show inflation accelerated.
“There will be some downward bias for the euro during this week and even more next week,” said Roberto Mialich, a senior currency strategist at UniCredit SpA in Milan. “We will be very surprised if the euro manages to hold the gains we saw at the end of 2010. There is a heavy calendar of debt auctions in the coming weeks so this is a potential drag for the euro.”
The euro weakened 0.6 per cent to $1.3311 in New York, paring a decline of as much as 1 per cent. It rose to $1.3425 on December 31st.
The common currency fell 6.5 per cent in 2010, its biggest decline since 2005, even as it appreciated 9.4 per cent in the second half.
The euro was little changed at 108.39 yen, after weakening to 107.80.
Financial markets in the UK, Australia, New Zealand and Japan were closed yesterday for public holidays. – (Bloomberg)
