LONDON—The euro extended losses against the dollar and the yen during European trading hours Thursday while other risky currencies like the Australian dollar also lost ground after a mixed result to France's long-dated debt auctions failed to satisfy currency traders.
The euro sank to $1.2833 and traded as low as ¥98.58 following the French auction results. France managed to sell almost all of the €8 billion ($10.36 billion) in long-dated bonds that it had hoped to sell, and bond strategists tended to see the outcome as successful. But that wasn't enough to please currency traders, who took it as a cue to offload more euros.
A London-based trader also said that worries about European banks' exposure to Hungary and Poland were hitting the euro. Banking stocks were leading declines on European bourses.
The euro's earlier weakness had been partly driven by unconfirmed chatter that a large German bank would need to raise capital, according to several London-based traders.
Traders placing negative euro bets against the dollar and clunky liquidity also weighed on the single currency, said Michael Sneyd, a currency strategist at BNP Paribas in London.
