The euro declined to a two-year low versus the dollar on concern anti-austerity opposition party Syriza will win Greek elections next month, endangering the country’s bailout agreement.
The 18-nation euro fell versus 11 of its 16 major counterparts amid speculation the European Central Bank will introduce more currency-depreciating stimulus next year to revive growth. The yen gained for the first time in three days as Asian stocks retreated, spurring demand for haven assets.
China’s yuan fell to a six-month low versus the dollar. Malaysia’s ringgit slid for a second day as oil headed for its biggest annual decline since 2008.
“The euro is going to break $1.20 against the dollar in the first quarter,” said Kazuo Shirai, a trader at MUFG Union Bank NA in Los Angeles. “More than continued improvement in the US, it’s a case of Europe and other regions stumbling.”
The euro declined 0.1 percent to $1.2139 at 2:22 p.m. in Tokyo after sliding to $1.2132, the weakest level since July 2012. The shared currency dropped 0.3 percent to 146.23 yen. The yen strengthened 0.2 percent to 120.45 per dollar.
Greek Prime Minister Antonis Samaras failed in his third and last attempt to persuade parliament to support his presidential candidate, Stavros Dimas. Samaras was due to meet current President Karolos Papoulias in Athens Tuesday to request early elections on Jan. 25.
Opinion polls show Syriza led by Alexis Tsipras ahead of Samaras’s New Democracy party.
The ECB next meets on Jan. 22 amid speculation officials are preparing to consider sovereign-bond purchases to drive down borrowing costs and revive inflation.
The euro has weakened 1.9 percent this year, according to Bloomberg Correlation-Weighted Indexes that track 10-developed nation currencies. The dollar gained 13 percent, while the yen weakened 3 percent.
The yen advanced against all it 16 major counterparts today as the MSCI Asia- Pacific Index of shares dropped 0.7 percent, extending its annual decline.
China’s yuan fell for a third day before data this week that economists say will show the economy is losing momentum.
