LONDON (SHARECAST) - The dollar started the week on strong footing against the euro on fresh uncertainty about Europe’s economic stability. Last week the euro came off a four year low, posting strong gains, but the recovery was short lived after news that the Bank of Spain had stepped in to rescue one of its largest regional banks Cajasur. Fresh jitters about Europe’s problems hit sentiment towards the euro. The single currency was also down against the yen and sterling. The yen has continued to strengthen on continued risk aversion while the dollar was up more than 1% against the euro to $1.2404. Traders took initial interest in sterling as the UK coalition government outlined where it will make cuts of £6.25bn to tackle Britain’s £156bn debt. The euro dropped 1.2% to 85.89p on fresh concerns about the financial health of the euro zone. However sterling pared gains later in the session as stock markets fell into the red. US stocks lost its grip on Friday’s gains to end Monday with steep losses on uncertainty about Europe’s financial stability and increased regulation on Wall Street.

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