The euro fell against the yen to the weakest level in more than 11 years as investors sought the relative safety of the Japanese currency and pushed German bond yields to record lows amid a deepening of Europe’s debt crisis.
The Dollar Index climbed to a 21-month high after Chinese manufacturing grew less than forecast last month and before a report that US payrolls probably picked up from the weakest pace in six months. The 17-nation currency slid to the lowest in almost two years against the dollar after euro zone unemployment surged to the highest on record.
“We’ve definitely seen an intensification of the euro-zone crisis,” said Simon Derrick, chief currency strategist at Bank of New York Mellon in London. “What you’ve seen is people saying where were the true safe havens are, and coming to the conclusion that ultimately there really were only two, Japan or the US” Derrick said they have $1.17 targeted against the euro.
The euro tumbled 0.6 per cent, the weakest since November 30, 2000. The shared currency fell 0.3 per cent to $1.2323 after depreciating to $1.2312, the least since July 1, 2010. The US currency was 0.2 per cent lower at 78.19 yen.
Yields on German two-, five-, 10- and 30-year bonds dropped to records today, as did those on 10-year Treasuries and British gilts.
The euro posted its ninth daily decline against the yen, the longest losing streak since March 2000, after a report showed unemployment in the euro zone reached 11 per cent in April and March, the highest since the data series started in 1995.
Italian Prime Minister Mario Monti and ECB President Mario Draghi pushed Germany to give up its opposition to direct euro zone aid for struggling banks.
The Dollar Index, which IntercontinentalExchange uses to track the greenback against the currencies of six US trading partners, gained as much as 0.4 per cent to 83.39, the highest level since August 2010.
