FX:Euro loses ground on Spain jitters, weak German Ifo
Forexpros - The euro was weaker against almost all of the other major currencies on Monday, as investors remained jittery amid uncertainty over whether Spain will request a bailout, while weak German data also hit demand for the single currency.
During European early afternoon trade, the euro was lower against the U.S. dollar, with EUR/USD down 0.42% to 1.2925.
The euro lost ground following a report showing that Germany’s Ifo business confidence index deteriorated to the lowest level since March 2010 this month, amid ongoing concerns over euro zone’s debt crisis.
The German Ifo index fell to 101.4 from 102.3 in August, the fifth monthly decline in a row, compared to expectations for a reading of 102.5.
Meanwhile, uncertainty over whether Spain will request a full scale sovereign bailout weighed.
On Thursday Madrid is to present its draft budget for next year and announce structural reforms, while the results of bank stress tests are due on Friday. In addition, ratings agency Moody’s is expected to complete a ratings review on Spain later this week.
Over the weekend, Spain’s economy minister said the country would not rush to seek external financial aid, as pressure mounted on Spain to seek a bailout.
The single currency was down against the pound, with EUR/GBP losing 0.28% to trade at 0.7975.
The euro was also lower against the yen and the Swiss franc, with EUR/JPY falling 0.57% to 100.86 and EUR/CHF sliding 0.15% to 1.2094.
The minutes of the Bank of Japan’s August meeting published earlier showed that policymakers believed a high degree of uncertainty over the global economic outlook remained and said that the bank would proceed with continuous monetary easing.
The shared currency was mixed against the Australian, New Zealand and Canadian dollars, with EUR/AUD inching up 0.04% to 1.2415, EUR/NZD advancing 0.50% to 1.5735 and EUR/CAD edging up 0.03% to 1.2677.
Meanwhile, concerns over Greece persisted as Athens prepared to present a package of spending cuts demand by international lenders to euro zone officials at the end of this week, amid fears that the country’s budget shortfall could be larger than expected.
