Euro on track for 3% annual fall against greenback, slumps vs. yen
By Deborah Levine and William L. Watts, MarketWatch
NEW YORK (MarketWatch) — The U.S. dollar pared some of its gains for the year on Friday, though it’s up for 2011 versus most major currencies other than the top-performing Japanese yen.
It’s the second year of gains for the greenback.
The dollar index DXY -0.40% , which measures the U.S. unit against a basket of six major currencies has advanced 1.3% this year after a 1.5% gain in 2010.
The benchmark lately traded at 80.018, off from 80.425 late Thursday.
The euro EURUSD +0.08% , which slipped to a fresh 15-month low on the dollar in the previous session, changed hands at $1.2996, up from $1.2949 in North American trading late Thursday.
Traders eyeing short-term technical levels could be driving activity, analysts at GFT said.
The euro had been lower until Spain, a euro-zone country that’s been much in the spotlight and seen its yields rise, said its 2011 budget deficit would be higher than previously forecast. Read about Spain’s budget deficit.
For the year, the shared currency is on track for a 3% loss versus the dollar, its second consecutive annual decline. It’s down from a high around $1.49 in May, when hopes about containing the sovereign-debt crisis ran high.
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 euro EURJPY -0.73% also fell to its lowest level in more than a decade against the Japanese yen. It fell 0.5% to ÂĄ100.04 Friday, after briefly slipping under the ÂĄ100 level.
For its part, the dollar 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 U.S. 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, technical strategist at DailyFX, the research arm of FXCM.
The euro could fall back toward $1.20 over the coming months, he said.
