Euro on track for annual fall of more than 3% vs. greenback
By Deborah Levine and William L. Watts, MarketWatch
NEW YORK(MarketWatch) — The U.S. dollar was poised Friday to end 2011 with annual gains versus most major rivals other than the top-performing Japanese yen.
It’s the second year of gains for the greenback.
The dollar index DXY -0.27% , which measures the U.S. unit against a basket of six major currencies has advanced 1.6% this year after a 1.5% rise in 2010.
The dollar index lately traded at 80.277, from 80.425 in North American trade late Thursday.
The euro EURUSD +0.10% , which slipped to a fresh 15-month low versus the dollar on Thursday, changed hands at $1.2953, little changed from $1.2949 late Thursday.
It was lower earlier until Spain, another country that’s been in the spotlight and seen yields rise, said its 2011 budget deficit would be higher than previously forecast. Read about Spain’s budget deficit.
For the year, the euro is on track for a 3.2% loss versus the dollar, its second consecutive annual decline.
The euro has slumped as European leaders have failed to contain a two-year debt crisis that this year threatened to engulf Italy, the euro zone’s third-largest economy and home to one of the biggest debt markets in the world. See more on euro outlook for 2012.
The dollar also gained against a number of emerging-market currencies falling in 2011. Read about the dollar vs. emerging-market currencies.
For the next year, “we anticipate across the board U.S. dollar bids against all major and minor currencies, with the US.. dollar seen as the most attractive currency in 2012 on both its safe-haven appeal and the prospects for a sustained economic recovery in the United States,” said Joel Kruger, a technical strategist at DailyFX, the research arm of FXCM.
The euro could fall back towards $1.20 over the coming months, he said.
Recession likely in euro zone
The euro is expected to be weighed down neat year as the 17-nation currency area is seen by economists as likely to move into recession.
At the same time, improving labor data and other economic indicators have served to calm worries about a U.S. recession.
